8 things every business owner should know about the new Finance Act

8 things every business owner should know about the new Finance Act

January 31, 2020
  1. The Act comes into effect on Saturday the 1stof February, 2020.
  2. Value Added Tax (VAT) has increased from 5% to 7.5% but items in the VAT exemption list are tax free.
  3. If you have a business that reports less than ₦25million turnover as at last filed returns, you will not be filing returns/charging VAT as from 1st February, 2020 until you achieve this threshold in a singular or in cummulative transaction(s) in a calendar.
  4. The decision not to charge can only be taken based on your cummulative performance as at 31stDecember, 2020.
  5. Companies are now classified into three (3) different categories:
COMPANY SIZE TURNOVER COMPANY’S INCOME TAX
Small Company N25, 000, 000 or less Exempted from CIT
Medium Company Above N25m & less than N100m 20% of profit as CIT
Large Company N100m and above 30% of profit as CIT

 

  1. Stamp duty on bank transfers to apply only on amount from N10, 000 and above, while transfers between the same owner’s account in the same bank to be exempted.
  2. Bonus of 2% of tax payable (medium-sized companies) and 1% for large companies for early payment of CIT.
  3. Email correspondence to be recognized for communicating with the tax authorities.

Ensure you adjust your invoices to reflect the new VAT rate starting February 1, 2020. We would love to hear from you if you have any more inquiries about the new Finance Act.

 

 

The information in this blog post (“post”) is provided for general informational purposes only, no information contained in this post should be construed as legal advice, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through this post without seeking the appropriate legal or professional advice from the particular facts and circumstances at issue from a lawyer. This post is protected by intellectual property law and regulations. It may however be shared using appropriate sharing tools provided that our authorship is always acknowledged and this Disclaimer Notice attached.

 

 

More Articles

Search

Connect With Us

Got any questions?

If you are having any questions, please feel free to ask.

Send us an email

Frequently Asked

  • When are Annual Returns due for filing?

    A company’s first Annual Returns are due for filing after 18 months of its inception, subsequently it should be filed annually as the name implies. The filing dates could differ for each company depending on their financial year end but must be filed not later than 42 days after its Annual General Meeting.

    The Annual Returns for Business Names is due not later than the 30th of June each year except in the year the business was registered.
  • Must my Company Secretary be a Lawyer?

    Although it’s ideal to have a lawyer as a company secretary, it is not compulsory for small private businesses.
  • What is an execution clause in a contract?

    This is the section in which the parties sign the contract or agreement.
  • What are the benefits of Registering with SON?
    1. Product traceability in the Nigerian market
    2. Detection of counterfeit products
    3. Barriers to the circulation of substandard goods
    4. The official SON Product Registration Logo and number are displayed on registered products.
  • What is data protection?

    Data protection is a legal process of protecting sensitive data.
  • Does a trademark search automatically reserve my trademark name?

    No, a trademark search does not automatically reserve that which is sought to be trademarked. A search ascertains whether that which is sought to be trademarked is available or violates any existing trademark.
  • Is there a penalty for late renewal of registration of products with NAFDAC?

    Yes, there is a late renewal fee, which is dependent on the category of the product.
  • What is the first thing I must do to register a business in Nigeria?

    To register a business in Nigeria; you would need to conduct a name search of the business. You can achieve this using your CAC-CRP account.
  • Why do I need a trademark?

    You need to register your trademark because if you don’t register it, someone else can! It helps identify you as the source and indicates a consistent level of quality of your products and services. Securing a registered trademark protects your brand, and provides you with tools to prevent someone else from using similar signs and riding off the back of your business.
All FAQs
Call Us Now on +234 901 719 0079 Chat on WhatsApp