Finance Bill 2020: FEC Approves; Minister says no Tax Increment

The Minister of Finance, Zainab Ahmed, has said that the incremental changes to Nigeria’s tax laws does not portend likely increase in taxes.

Ahmed made the declaration on Wednesday, while addressing State House correspondents after the council has approved the Finance Bill 2020.

The minister explained that the bill will ensure improvement in tax laws as well as reduce the burden of some taxes for small and medium businesses in Nigeria.

“When we say incremental changes, its making improvements in the tax law. It doesn’t mean increasing taxes. So, what we are doing in the Finance Bill for 2020, has no increases. There will be no VAT increase, VAT remains at 7.2%,” Ahmed said.

“So, when we say incremental, we mean gradually making changes so, the changes could be up or down. But for now, with the economic slowdown, our assessment is that this is the time to cut down on taxes, to not increase taxes at all and also to not increase levies”.

She made reference to the 2019 Finance Bill to buttress her point. “And I gave an example of the changes we are making in the tax law. in the last Finance Bill 2019, we reduced from 30% to 20% for enterprises that have turnover of between 25million to 100 million and we also moved taxes from 30% to 0% for enterprises that have turnover of 25 million and below which means they pay no taxes.

Explaining further she said, “What we are doing in the Finance Bill 2020 is to further remove the education tax of 2% for that lower category of enterprises that have a turnover of 25 million and below.

Meanwhile, the 2020 Finance Bill will now be sent to the National Assembly for assent before actual implementation.