On 31 December, 2021, President Muhammadu Buhari signed the Finance Bill, 2021 (now Finance Act, 2021) into law. The Finance Act, 2021 (the Act), which was signed into law alongside the 2022 Appropriation Bill, introduces significant changes to a number of tax and regulatory laws in Nigeria in response to the continuing negative impact of the COVID-19 pandemic on the economy and the current recession.
At the end of the second millennium, the Finance (Miscellaneous Provisions) Act No.30 of 1999 was passed to revise certain provisions of the Nigerian tax laws. Since then, the use of this avenue for legislative review had not been deployed despite the prevalence of redundant and anti-business provisions that continued to exist in our tax laws. However, President Muhammadu Buhari remarkably signed into law the Finance Act, 2019 two decades later to revise certain redundant and anti-business provisions that existed in our tax laws. In a similar vein, the Finance Act, 2020 and most recently the Finance Act, 2021 with a commencement date from 1 January 2022 were signed into law by the President.
The Finance Act, 2021 amends some key provisions of laws such as the Capital Gains Tax Act, Companies Income Tax Act, Federal Inland Revenue (Establishment) Act, Personal Income Tax Act, Stamp Duties Act, Tertiary Education Trust Fund (Establishment) Act, Customs, Excise, Tariffs etc. (Consolidation) Act, Value Added Tax Act, Insurance Act, Nigerian Police Trust Fund (Establishment) Act, National Agency for Science and Engineering Infrastructure Act, Finance Control and Management Act, and Fiscal Responsibility Act.
Given the volume of the Finance Act, 2021 and the associated complexity of legal provisions for business owners, we have provided highlights of key provisions and analysed the changes introduced by the Act for the relevant tax types in this document.
We hope that you find the summary and commentaries useful. However, you are free to engage us to provide detailed advice on the implications of the laws and the new provisions for your business or upcoming projects as this document does not constitute professional advice.
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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.