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

1. The Act comes into effect on Saturday the 1^stof 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 31^stDecember, 2020.
5. Companies are now classified into three (3) different categories:

6. 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.
7. Bonus of 2% of tax payable (medium-sized companies) and 1% for large companies for early payment of CIT.
8. 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.

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