{"id":23919,"date":"2020-01-19T22:05:47","date_gmt":"2020-01-19T21:05:47","guid":{"rendered":"https:\/\/everyday.ng\/?p=23919"},"modified":"2020-01-19T22:05:47","modified_gmt":"2020-01-19T21:05:47","slug":"presidency-lists-20-basic-food-items-others-on-vat-exemption-list-in-finance-act-2019","status":"publish","type":"post","link":"https:\/\/everyday.ng\/?p=23919","title":{"rendered":"Presidency lists 20 basic food items, others on VAT Exemption list in Finance Act 2019"},"content":{"rendered":"

By Laolu Akande<\/strong>, Senior Special Assistant to the President on Media & Publicity, Office of the Vice President
\nIn a bid to ensure that the cost of living does not rise for Nigerians because of the changes in the Value-Added Tax, several basic food items, locally manufactured sanitary towels, pads and tuition relating to nursery, primary, secondary and tertiary education have been added to the exemption list of goods and services on the VAT under the Finance Bill 2019, signed by President Muhammadu Buhari last week, on the 13th January 2020.
\nAmongst other benefits, the law will consolidate efforts already made in creating the enabling environment for improved private sector participation and contribution to the economy as well as boost states\u2019 revenues.
\nAccording to the President, \u201cthe Finance Bill will support the funding and implementation of the 2020 Budget. We shall sustain this tradition by ensuring that subsequent budgets are also accompanied by a Finance Bill.\u201d
\nBelow are the details:
\nThe Finance Bill, 2019 was submitted to the National Assembly by President Muhammadu Buhari alongside the 2020 Appropriation Bill, and signed into law by the President on January 13, 2020.
\nThe Bill, now an Act, has the following objectives:
\nPromoting fiscal equity by mitigating instances of regressive taxation;
\nReforming domestic tax laws to align with global best practices;
\nIntroducing tax incentives for investments in infrastructure and capital markets;
\nSupporting Micro, Small and Medium-sized businesses in line with the administration\u2019s Ease of Doing Business Reforms;
\nRaising Revenues for Federal, State and Local Governments.
\nFACTSHEET ON NEW FINANCE ACT 2019<\/strong>
\nThe new Act is the first legislation created to accompany an Appropriation Act since the return of democracy in 1999.
\nThe new Act raises VAT from 5% to 7.5%.
\nTo allay fears that low-income persons and companies will be marginalized by the new law, reduce the burden of taxation on vulnerable segments, and promote equitable taxation, the Finance Act 2019 has extended the list of goods and services exempted from VAT. The additional exemptions include the following:
\nBasic food items \u2013 Additives (honey), bread, cereals, cooking oils, culinary herbs, fish, flour and starch, fruits (fresh or dried), live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, water (natural water and table water)
\nLocally manufactured sanitary towels, pads or tampons.
\nServices rendered by microfinance banks
\nTuition relating to nursery, primary, secondary and tertiary education.
\nNigeria\u2019s increased new VAT rate of 7.5% is still the lowest in Africa, and one of the lowest anywhere in the world. (South Africa VAT: 15%; Ghana: 12.5%; Kenya: 16%; Egypt: 14%; Rwanda: 18%; Senegal: 18%)
\nUnder Nigeria\u2019s revenue sharing formula, 85% of collected VAT goes to States and Local Governments. This means that the bulk of additional VAT revenues accruing from the increase will go towards enabling States and Local Governments meet their obligations to citizens, including the new minimum wage as already noted by State Governors. Before now, the Buhari administration had firmly resisted previous suggestions to raise VAT.
\nThe new Finance Act exempts Businesses with turnover below 25 million from VAT payments.
\n\u25aa Companies Income Tax (CIT)
\nUnder the new law small companies \u2013 companies with less than N25 million in annual turnover are charged Zero CIT.
\nCIT for Companies with revenues between N25 and N100m (described in the Act as \u201cmedium-sized\u201d companies) has been reduced from 30% to 20%
\nLarge companies \u2013 with annual turnover greater than N100m \u2013 will continue to pay the standard 30% CIT
\nThe new Act includes a provision that grants to all companies \u201cengaged in agricultural production\u201d in Nigeria \u201can initial tax-free period of five years\u201d, renewable for an additional three years.
\nThe new Act also provides incentives to promote tax compliance through bonus reductions in CIT for early remittance:
\n*2% bonus for medium-size companies
\n*1% bonus for other companies.
\n\u25aa Personal Income Tax Act
\nThe new Act now includes \u201celectronic mail\u201d as an acceptable form of correspondence for persons disputing assessments by the Tax Authorities.
\n\u25aa Contributions to Pension and Retirement Funds, Societies and Schemes are now\u00a0unconditionally\u00a0tax-deductible.
\n\u25aa Stamp Duty Act
\nWith the new Act, the N50 Stamp duty1 charge is now applicable only to transactions amounting to N10, 000 and above, a significant increase on the former threshold of N1,000.
\n\u25aaThe new Act also expands the list of items exempted from stamp duty.
\n\u25aa Customs and Excise Tariff
\nTo reduce unfair advantages previously conferred on imported goods at the expense of locally manufactured ones, certain imported goods are now subject to excise duties similar to locally manufactured goods.<\/p>\n

\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

By Laolu Akande, Senior Special Assistant to the President on Media & Publicity, Office of the Vice President In a bid to ensure that the cost of living does not rise for Nigerians because of the changes in the Value-Added Tax, several basic food items, locally manufactured sanitary towels, pads and tuition relating to nursery, […]<\/p>\n","protected":false},"author":7,"featured_media":22415,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,7],"tags":[802,803,138],"class_list":["post-23919","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","category-news","tag-exemption","tag-food","tag-vat"],"_links":{"self":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/23919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=23919"}],"version-history":[{"count":0,"href":"https:\/\/everyday.ng\/index.php?rest_route=\/wp\/v2\/posts\/23919\/revisions"}],"wp:attachment":[{"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=23919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=23919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/everyday.ng\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=23919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}