The Finance Act has become a special and very important legislation that addresses pressing loopholes or shortcomings in the existing tax and other related legislations. It achieved this by making amendments to the provisions of existing tax and other related laws, repealing or introducing new provisions to the target laws to provide innovative solutions to identified challenges in the tax system. It is a revenue-oriented legislation, focused on maximizing public revenue and, or addressing challenges affecting the economy to ensure economic growth through the generation of revenue for funding of the annual budget.
In the last two years, Nigeria consistently enacted the yearly Finance Act, and it is understood that this will continue to be an annual event to ensure constant updating of Nigeria’s tax laws in line with economic realities and global trends. On December 31, 2020, the extant Finance Act, 2020 was signed into law. This Act brought in sweeping changes to the following laws among others:
a. Capital Gains Tax Act, Cap. C1, L.F.N 2004;
b. Companies Income Tax Act, Cap. C21, L.F.N 2004;
c. Personal Income Tax Act, Cap. P8, L.F.N, 2004;
d. Customs and Excise Tariff etc. (Consolidated) Act, Cap. C49, L.F.N, 2004;
e. Value Added Tax Act, Cap. VI, L.F.N 2004;
f. Nigeria Export Processing Zone Act, Cap. N107, L.F.N, 2004;
g. Oil and Gas Export Free Zone Act, Cap O5, L.F.N, 2004;
h. Industrial Development (Income Tax Relief) Act, Cap. I7, L.F.N, 2004;
i. Stamp Duties Act, Cap. S8, L.F.N, 2004;
j. Tertiary Education Trust Fund (Establishment) Act, No.16, 2011;
k. Federal Inland Revenue Service (Establishment) Act, No. 13. 2007;
l. Fiscal Responsibility Act, No. 31, 2007;
m. Public Procurement Act, No. 14, 2007 and
n. Companies and Allied Matters Act No. 3, 2020.
This article aims to examine and review the salient innovations introduced by the Finance Act, 2020.