President, Muhammadu Buhari at the state house in Abuja on Monday signed the Finance Bill (now Finance Act) into law.
While presenting the Appropriation bill, the National Assembly presented the Financial Bill. The bill among other reasons seeks to increase the value-added tax (VAT) from 5% to 7.5%.
It was stated that “this is the first time since democracy in 1999, that a federal budget is being accompanied by the passage of a Finance Bill specially designed to support its implementation, and to create a truly enabling environment for business and investment by the private sector.
This development was made public by the President via his official twitter handle where he stated that the Finance Act was specially designed to support the implementation of the 2020 National Budget and to create an enabling environment for businesses.
He stated that” the Act has five strategic objectives, which includes: raising government revenue through various fiscal measures, reforming domestic tax laws.
To align with global best practice, promoting fiscal equity by mitigating instances of regressive taxation, supporting small business entities in line with Ease of Business Reforms and introducing tax incentives for investments in infrastructure and capital market.
The new Value Added Tax rate(VAT) according to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, is expected to take effect in the first quarter of 2020.