The Finance Act 2020 was signed into law on 31 December 2020 and comes into effect on 1 January 2021. The new law introduces over 80 changes to 14 different laws that will affect all stakeholders.
Some of the key changes include:
1. Exemption of low-income earners earning N30k per month or less from personal income tax. So no PAYE on their salaries.
2. Unclaimed dividends in a listed company and dormant account balances unutilised for 6yrs or more to be transferred to Unclaimed Funds Trust Fund to be managed by the DMO. Amounts can subsequently be claimed by the owner at any time together with the yield thereon
3. Scope of items liable to excise duties have been expanded to include telecommunication services provided in Nigeria as may be prescribed in the law or an Order issued by the President.
4. Reduction of import duty on Tractors from 35% to 5%; Mass transit vehicles for transport of more than 10 persons and Trucks from 35% to 10%, and reduction of import levy on Cars from 35% to 5%.
5. The new law clarifies that land & building are not taxable goods for VAT purposes. This means no VAT on transfer of land or purchase of building. Impliedly, no VAT on rent of property.
6. Exemption of commercial airline ticket from VAT.