The Senate at its plenary session of Wednesday, 11 March 2020 passed for second reading the Finance Act (Amendment) Bill, 2020 which seeks to amend certain tax provisions and other tax statutes in line with the Principal Act.
Leading the debate on the Bill, the Leader of the Senate, Sen. Yahaya Abdullahi (APC: Kebbi) mentioned the highlights of the Bill to include:
- Amendment to section 23 of the Companies Income Tax Act pursuant to section 9 of the Finance Act, 2019 to clarify newly introduced tax incentives for Agricultural production, which ordinarily should have fallen under the Industrial Development (Income Tax Relief) Act for administrative reasons.
- Clarifying the effective date for the commencement of the increase in Value Added Tax (VAT) from 5% to 7.5%.
- Clarifications regarding the definition of “Basic Food Items” exempted from Value Added Tax.
- An Amendment to sections 1 and 25 of the Industrial Development (Income Tax Relief) Act clarify newly introduced tax incentives for Agricultural production.
Sen. Abdullahi then canvassed for the Bill passage noting that the Bill, if passed, will address the economic and social needs of Nigeria.
It would be recalled that President Muhammadu Buhari in a letter read by the President of the Senate, Sen. Ahmad Lawan (APC: Yobe) at the plenary session of Tuesday, 10 March 2020 forwarded the Finance Act (Amendment) Bill for Senate’s consideration and passage. A similar Bill amending the Finance Act has been presented in the House of Representatives.
The Finance Act , 2019 which amended seven (7) existing tax and fiscal policy laws (Companies Income Tax Act, 2004; Value Added Tax Act, 2007; Customs and Excise Tariff (Consolidation) Act, 2004; Personal Income Tax Act, 2007; Capital Gains Tax Act, 2007; Stamp Duties Act, 2007; and Petroleum Profit Tax Act, 2004) was passed by the Senate on Thursday, 21 November 2019 and eventually signed into law by President Muhammadu Buhari on 13 January 2020.
