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FINANCE ACT 2020: Key changes and implications
On
President Muhammed Buhari, on 31 December 2020, signed the Finance Act 2020 (FA20) alongside the 2021 Appropriation Act into law. This reaffirms the Federal Government of Nigeria’s (FGN) commitment to enact fiscal policy annually, alongside the passage of the annual budget into law and aligns with global best practice.
The Act, which took effect on January 01, 2021, amended the provisions of 14 tax and fiscal related legislation, namely:
Capital Gains Tax Act (CGTA) Companies Income Tax Act (CITA) Industrial Development (Income Tax Relief) Act (IDITRA) Personal Income Tax Act (PITA) Tertiary Education Trust Fund (Establishment etc.) Act Customs and Excise Tariff, etc. [Consolidation] Act (CETA) Value Added Tax Act (VATA) Stamp Duties Act (SDA) Federal Inland Revenue Service (Establishment) Act (FIRSEA) Nigeria Export Processing Zones Act (NEPZA) Oil and Gas Export Free Zone Act (OGEFZA)
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On 31 December 2020, the President signed the Finance Bill, 2020
(now Finance Act, 2020) into law, alongside the 2021 Appropriation
Act. Indeed, the introduction of the Finance Act, 2020 (FA 2020) at
the beginning of fiscal year 2021 is a step in the right direction.
One can come to a conclusion that the Nigerian government is making
conscious efforts to align its local laws with global best
practices, promote fiscal equity, improve the ease of doing
business, provide support for small businesses and cultivate a
suitable environment for investment in infrastructure. The effort
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Introduction
In a bid to ensure that economic and financial challenges faced
by the country are promptly managed and addressed through revised
and definite economic policies, President Muhammadu Buhari signed
the Finance Bill 2020 into law which is now known as the Finance
Act 2020 ( The Act ) on December 31, 2020 alongside the
2021 Appropriation Bill. This aligns with best practices in
different jurisdictions across the world where existing tax
legislations and framework are annually reviewed in order to
support each year s budget and a major aspect of the
initiatives suggested by the President Enabling Business
Environment Council (PEBEC) and the National Tax Policy
Implementation Committee.
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Summary
On 31st December, 2020, President Muhammadu Buhari signed the
Finance Bill, 2020 (now Finance Act) into law. The Finance Act,
2020 (the Act), which has a commencement date of 1st January 2021,
was signed into law alongside the 2021 Appropriation Bill (now
Appropriation Act). The Act introduces significant changes to a
number of tax and regulatory laws in Nigeria including the
introduction of COVID-19 incentives alongside other changes.
Details
In December 2020, President Muhammadu Buhari transmitted the
Finance Bill, 2020 to the National Assembly for consideration and passage
into law in support of the 2021 Appropriation Bill. Subsequently,