Following approval by the Federal Executive Council (FEC), the 2020 Finance Bill that seeks to provide more tax incentives for Nigerian businesses and individuals has been formally presented to State governors under the aegis of the National Economic Council (NEC), at a meeting presided over by Vice President Yemi Osinbajo, SAN.
This was disclosed in a press statement issued by Laolu Akande, Senior Special Assistant to the Vice President on Media and Publicity.
The proposed bill has been transmitted to the National Assembly.
While presenting the highlights of the bill during the NEC meeting, Minister of State for Budget and National Planning, Mr Clem Agba explained that the bill provides for “reduction in duties on tractors from 35 to 10 per cent; Reduction in duties on motor vehicles for the transportation of goods from 35 to 10 per cent.
“Reduction of levy on motor vehicles for the transportation of persons (cars) from 35 per cent to 5 per cent.
“Exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND)-companies with less than N25m turnover are eligible
“50 per cent reduction in minimum tax; from 0.5 per cent to 0.25 per cent 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).
“Clarification that only compensation for loss of office up to N10million would be tax exempt. (Clarification that it is the employer’s obligation to account for tax on payments relating to compensation for loss of office.)
“Introduction of software acquisition as qualifying capital expenditure to improve the ease of doing business.”
He also expantiated that, “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. There were two notable issues with the provision.”