Federal Government presents Proposed Finance Bill 2020 to National Economic Council
Tax Alert: Issue No. 11.4 | November 2020
The Federal Government on Thursday, 19 November 2020, presented the proposed Finance Bill, 2020 (“the Bill”) to the State Governors at the National Economic Council Meeting presided over by the Vice President, Prof. Yemi Osinbajo, SAN, GCON. This followed the earlier approval of the Bill by the Federal Executive Council on Wednesday, 18 November 2020.
Some key proposals in the Bill include:
- 50 per cent reduction in minimum tax rate from 0.5 per cent to 0.25 per cent of gross turnover for financial years ending between 1st January 2020 and 31st December 2021.
- Exemption of small companies with less than ₦25million turnover from payment of tertiary education tax under the Tertiary Education Trust Fund (Establishment, Etc.) Act, 2011.
- Granting of tax relief to companies that donated to the COVID-19 relief fund under the Private Sector Coalition against COVID.
- Introduction of software acquisition as a qualifying capital expenditure to improve the ease of doing business
- Clarification on the amount of compensation for loss of office exempted from tax.
- Significant reduction in the rate of import duties payable on tractors and motor vehicles to 10% and 5%, respectively.
It is expected that the Bill will be presented to the National Assembly for review and passage alongside the 2021 National Budget and the 2021 Appropriation Act.
We will keep you updated on further developments in due course.
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