FG proposed legislation slashes import duties & levies, reduces minimum Tax, exempts small businesses from TETFUND, others

FG PRESENTS 2020 FINANCE BILL TO NEC:

PROPOSED LEGISLATION SLASHES IMPORT DUTIES & LEVIES, REDUCES MINIMUM TAX, EXEMPTS SMALL BUSINESSES FROM TETFUND, OTHERS.

Raises compensation exemption threshold, qualifies software acquisition for capital allowance

Following Wednesday’s 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 today by Vice President Yemi Osinbajo, SAN.

Some highlights of the proposed bill which is now headed to the National Assembly include:

1. Reduction in duties on tractors from 35 to 10 per cent

2. Reduction in duties on motor vehicles for the transportation of goods from 35 to 10 per cent.

3. Reduction of levy on motor vehicles for the transportation of persons (cars) from 35 per cent to 5 per cent.

4. Exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND)-companies with less than N25m turnover are eligible

5. 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.

6. Granting of tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID).

7. 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).