What’s the new finance bill about?
The bill was signed into law by President Buhari this year after both chambers of the National Assembly passed it last year. The goal of the finance act is to increase government revenue while bolstering the struggling small business sector in Africa’s largest economy.
These are 3 major aspects of the law that might be of interest to you:
- Value Added Tax (VAT) has increased from 5% to 7.5%
- Tax Identification Number (TIN) is now a compulsory requirement for business.
- Corporate Income Tax (CIT) has been reviewed
What are the important things?
Let’s focus on the business implication for you and discuss some tricks you can take advantage of.
- If the total revenue your business makes is less than N25 million per annum, you will be eligible for a tax break. This tax break is an incentive. Our finance expert advised that you still set this money aside and make effort to re-invest it to your business.
- How do you deal with the additional VAT increase? There are many schools of thought. But most people suggest you pass this additional increase to the customers by default. They also recommend that when you file your returns, clearly indicate the revised rates to show your compliance.
- On the TIN issue, it is good to keep in mind that your bank will request that you update your corporate account with your TIN if you have not already done so. What we know is that failure to comply might result in a lien on your account (you won’t be able to withdraw money). Here is the link to apply for your TIN online: https://jtb.gov.ng/
apply-for-tin/
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