Following the approval of the Finance Bill 2020 by Nigeria’s finance council, the Finance Minister, Zainab Ahmed has explained that the bill will not lead to an increase in taxes.
Because the bill mentioned an increase in tax laws, Nigerians had some fears that it automatically meant an increase in the taxes they pay.
Rather, she has explained, the bill has reduced taxes from 30% to 20% for businesses with a turnover ranging between N25m and N100m.
The Bill introduced some boost to the country’s tax laws and introduced reductions in taxes of small and medium scale businesses.
“When we say incremental changes, its making improvements in the tax law. It doesn’t mean increasing taxes. So, what we are doing in the Finance Bill for 2020, has no increases. There will be no VAT increase, VAT remains at 7.2%.
“And I gave an example of the changes we are making in the tax law.. in the last Finance Bill 2019, we reduced from 30% to 20% for enterprises that have turnover of between 25million to 100 million and we also moved taxes from 30% to 0% for enterprises that have turnover of 25 million and below which means they pay no taxes.
“What we are doing in the Finance Bill 2020 is to further remove the education tax of 2% for that lower category of enterprises that have a turnover of 25 million and below.
“So, when we say incremental, we mean gradually making changes so, the changes could be up or down. But for now, with the economic slowdown, our assessment is that this is the time to cut down on taxes, to not increase taxes at all and also to not increase levies”, She explained.