President Muhammadu Buhari has signed the 2019 Finance Bill into Law
President of the Federal Republic of Nigeria, Muhammadu Buhari, has signed the Nigerian Tax and Fiscal Law (Amendment) Bill 2019 otherwise known as the Finance Bill into law. The new law contains over 90 changes to 7 different tax laws including:
- an increase in the rate of VAT from 5% to 7.5%
- 0% CIT rate for small businesses and a lower rate of 20% for medium-sized companies
- requirement for TIN to open and operate a business bank account
- increase in the threshold of online transfers liable to stamp duty of N50 from N1,000 to N10,000
- taxation of foreign entities involved in digital transactions with significant economic presence in Nigeria.
Effective date: It was intended that the Bill would be signed into law in December 2019 and take effect from 1 January 2020. However, there was a delay due to the need for harmonization of changes introduced by the Legislature and a further vetting process by the Executive. Technically the law takes effect from today unless a future date is stated when the law is published in the gazette. We however expect that the effective date will be in the near future (February 2020 or later) to enable smooth implementation by both the tax authorities and taxpayers.
The Finance Bill (now an Act) cannot be implemented based on speculations regarding its content and effective date. Therefore changes will not take effect until the new law has been published in the gazette or otherwise officially made public.
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