NATIONAL PRODUCTIVITY GETS BETTER WITH 7.5% VAT

IMPORTANT INFORMATION ON NEW TAX LAW

Never be deceived with rumour going on about the FINANCE BILL recently signed into law by President Muhammadu Buhari.

Here are some of the basic FACTS you must know as a member of this group;

1. The FINANCE BILL took effect from FEBRUARY 1ST 2020.

2. New vat rate of 7.5% took effect from Feb. 1, 2020.

3. Contrary to widespread belief, you DO NOT REQUIRE a Tax Identification Number (TIN) to operate account.

✅The Finance Bill states "Every person engaged in banking shall require that a person intending to open a bank a/c for the purposes of its business operations must provide a Tax Identification Number (TIN) as a precondition for opening such bank a/c or continued operation of a bank account". However be expecting calls from your bankers only if your business accounts (Enterprises, Ventures and LTD) with them is yet to have a TIN and NOT personal accounts.

 

4. Raising VAT from 5% to 7.5% may translate to a slight decrease in the prices of Basic Food Items. HOW? The following items are currently attracting 5% Vat but effective from Feb.1st they are completely exempted from VAT i.e Zero VAT. They are as follows:

A) HONEY

B) BREAD

C) CEREALS including Maize, Rice, Wheat, Millet, Barley and Sorghum

D) COOKING OILS

E) CULINARY HERBS

F) FISH of all kinds other than ornamental

G) FLOUR & STARCH MEALS

H) FRUITS

I) MEAT & POULTRY products including Eggs

J) MILK

K) NUTS

L) PULSES

M) ROOTS such as Yam, Cocoyam, Sweet & Irish Potatoes

N) SALT & HERBS OF VARIOUS KINDS

O) VEGETABLES

P) NATURAL & TABLE WATER

Q) SANITARY PADS

R) TAMPONS

S) TUITIONS RELATING TO TERTIARY, SECONDARY, PRIMARY & NURSERY EDUCATION

✅When next you are in ShopRite, Grandsquare and other shopping malls, ensure you are not shortchanged. Pay 7.5% VAT only on VATABLE products please.

 

✅The above measures are aimed at alleviating the impact of the increase in VAT rate on the populace.

 

5. No more tax on compensations for job losses to an individual except it exceeds N10 million.

 

6. The N50 Stamp Duty on all inflows (credit alert) into accounts now applies to amount from N10,000 above.

 

7. If you are receiving dividends from oil companies such shall attract tax effective from February. It is presently exempted from tax.

 

Soon we shall highlight area of interest for Investors and business owners among us. However it is important to know note this:

 

✅Any business whose revenue is N25M and below would be exempted from registering, remitting, issuing tax invoice and collecting VAT.

Small Company: Turnover not more than N25M pays Zero Tax (Rate 0%).

Medium Company: Turnover greater than N25M but not more than N100M pays 20% Tax Rate.

Large Company: Turnover greater than N100M pays 30%

Early Tax Payment Bonus of 2% and 1% for medium and large companies provided payment is done at least 90days on or before due date.