Chances are, the only thing you’ve heard or really care about with the 2019 Finance Bill is the VAT increase, and it’s understandable, who wouldn’t want to know how much VAT they’ll be paying on a ₦ 5,000 cocktail, Harvested in Lagos.
But there’s actually a lot more to the bill than the Value Added Tax, here are a few more imaginative ways the government will be taking your money and one interesting way it won’t:
What is the bill about?
A.K.A – its objectives.
Officially, The 2019 Finance Bill aims to set the tone for Nigeria’s fiscal policy for 2020. To promote fiscal equality, align domestic laws with best practices and support micro, small and medium-sized businesses. Much grammar. Oyibo dripping.
Put simply, this bill looks to position Nigeria’s finances in the green and to also place Nigeria’s financial practices on par with its international counterparts.
Here’s what the 2019 Finance Bill will be switching up.
Companies Income Tax.
- Non-Resident Companies (NRC), we have news for you!
This bill will allow the taxation of NRCs with a significant economic presence in Nigeria and profit attributable to such activity.
So if your company is in the US, but is somehow benefitting from an economic presence in Nigeria, get ready for a little something like this:
It should be noted that the bill is quite vague on what a ‘significant economic presence’ means. If a Nigerian based in China runs an online store frequently patronised by Nigerians in Nigeria, will they be required to pay this tax? Questions, questions.
2. Companies without a Tax Identification Number (TIN), you won’t be able to operate a company account no mo’!
So you might want to run to your nearest IRS office to sort that out.
A little news, you can now carry forward losses indefinitely. This is a fancy accounting term that allowed insurance companies carry losses from a previous year into the new year, to offset a profit. This allows companies to reduce future tax payment. Before the 2019 Finance Bill, this was limited to only 4 years.
Personal Income Tax.
Some new-new, the bill has removed Personal Income Tax relief that individuals enjoy on account of children and dependent adults. Now this sounds like a pretty rough thing to have to do without, but when you consider the tax relief on 4 children amounted to around ₦ 1,500 and was a pain to recover. So yah.
Customs & Excise Tariff.
If you’re importing goods into Nigeria, I hope you have a little cash stashed somewhere for the excise duties you’ll be paying on them.
Yepp! Even though excise duties are usually reserved for exports, you will now have the rare privilege of paying them on imports as well.
Value Added Tax.
Nigeria’s VAT rate:
The Value Added Tax of Nigeria is officially going all the way up from 5% to 7.5 %. Just letting you guys know in case you needed an extra reason to stay home and not spend money on over-priced restaurants.
Read up on all the amendments here. Now go forth and impress your friends with all this new information you have.