President Muhammadu Buhari has signed the 2020 Finance Bill into law, officially making the Value Added Tax (VAT) 7.5 per cent.

Although the bill was submitted to the National Assembly alongside the budget in 2019, the signing is coming 27 days after the 2020 budget was signed into law on December 17.

“I am pleased to announce that this morning I signed into law the Finance Bill, 2019,” a tweet on the President’s Twitter account read. “We introduced the bill alongside the 2020 budget, to reform Nigeria’s tax laws to align with global best practices, support MSMEs in line with our Ease of Doing Business Reforms, incentivize investments in infrastructure and capital markets and raise government revenues.” he wrote

“This is the first time, since the return of democracy in 1999, that a Federal Budget is being accompanied by the passage of a Finance Bill specially designed to support its implementation, and to create a truly enabling environment for business and investment by the private sector.”

“I thank the leadership and members of the Ninth National Assembly for the hard work and support that have gone into the passage of the landmark Deep Offshore and Inland Basin PSC Amendment Bill, and the Finance Bill; both vital to the successful implementation of the 2020 Budget.” he further explained in his statement.

VAT 7.5 %  + New Finance Bill, to What End?

The law seeks to amend the Petroleum Profit Tax Act, Customs and Excise Tariff Act, Company Income Tax Act, Personal Income Tax Act, Value Added Tax, Stamp Duties Act and the Capital Gains Tax.

The bill also made provisions for companies with an annual turnover of less than N25 million to be exempt from paying company income tax. The Federal Government also raised the threshold from which stamp duty will be charged for online transactions from the current N1,000 to N10,000.

This seems like a mixed bag and knowing Nigerians, they will harp more on the fact that VAT is now 7.5% and probably trend it all day on social media. However, what are your thoughts on the 7.5% VAT and how will the new finance bill in general impact Nigerians and Nigerian businesses? Who will this new bill benefit the most, the people or the government? Tell us in the comments.


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