On 31 December 2020, the President, Muhammad Buhari, signed the Finance Bill 2020 and made it into law, which introduces significant changes to a number of tax and regulatory laws in Nigeria including the introduction of COVID-19 incentives alongside other changes. The Act takes effect from 1 January 2021. Some of the key amendments introduced by the Act include the following:
• Introduction of the concept of Significant Economic Presence (SEP) to Personal Income Tax.
• Small companies with below ₦25million turnover are exempted from payment of Tertiary Education Tax.
• Companies require to pay minimum 0.25% tax of gross turnover provided that the tax returns are prepared and filed in respect of a year of assessment that ends on any date between 1st January 2020 and 31st December 2021.
• Requirement for companies operating in the Free Trade Zones to file returns with the FIRS.
• Introduction of Excise Duty on telecommunication charges at a rate to be prescribed by the President.
• The Act excludes land and buildings, money and securities from the definition of goods and services for VAT purposes.
• Deductibility of donations made in cash or in kind to the government in respect of any pandemic or natural disaster.
• Empowerment of the Tax Appeal Tribunal to conduct hearings remotely via virtual proceedings.
