On Thursday, November 19 the 2020 Finance Bill has been formally presented to State Governors.
This was done at the National Economic Council (NEC) meeting presided over by Vice President Yemi Osinbajo.
The bill was approved by the Federal Executive Council (FEC) on Wednesday.
Now headed to the National Assembly, it will provide more tax incentives for Nigerian businesses and individuals.
Some highlights are: “Reduction in duties on tractors from 35 to 10 percent; Reduction in duties on motor vehicles for the transportation of goods from 35 to 10 percent.
“Reduction of levy on motor vehicles for the transportation of persons (cars) from 35 percent to 5 percent; Exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND). Companies with less than N25m turnover are eligible.”
The benefits also include 50 percent reduction in minimum tax from 0.5 percent to 0.25 percent for gross turnover for financial years ending between January 1st, 2020 and December 31st, 2021; Granting of tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID).
There is tax exemption as compensation for loss of offices worth N10million. In this case, it is the employer’s obligation to account for tax on payments relating to reimbursement.
Another gain is the introduction of software acquisition as qualifying capital expenditure to improve the ease of doing business.
Prior to the Finance Act 2019, compensation paid to an employee for loss of office over and above N10, 000 was subject to capital gains tax.