Policy Implications of Finance Act, 2020: (Towards Tax Policy Reforms & Economic Recovery)
Abiahu, Mary-Fidelis Chidoziem and Oyedokun, Godwin and Fowokan, Titi and Akintoye, Rufus Ishola and Awogbade, Adefisayo and Adeyemi, Ayodeji, Policy Implications of Finance Act, 2020: (Towards Tax Policy Reforms &Amp; Economic Recovery) (February 28, 2021). Available at SSRN: https://ssrn.com/abstr
38 Pages Posted: 12 Aug 2021 Last revised: 31 Mar 2022
Date Written: February 28, 2021
His Excellency, President Muhammadu Buhari on Thursday, 8 October 2020, presented the 2021 Budget Proposal to the Joint session of the National Assembly. A major highlight of his budget presentation speech was the expression of the government’s intention to present the Finance Bill, 2020 for consideration and passage into law. Subsequently, the Federal Executive Council (FEC), on Wednesday, 18th November 2020 approved the Finance Act (Amendment Bill), 2020. Thereafter, the approved bill was presented to the National Assembly for legislative action. It was passed by the Senate on 17th December 2020. Subsequently, the National Assembly transmitted the same to the President for his assent, in line with the provisions of Section 58 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). The President’s assent to the bill was given on 31st December 2020 aligning with the 2021 Budget implementation cycle. It is commendable that the annual review of the finance act has become consistent with the expectations of stakeholders, particularly in tandem with the need to shape the direction of government fiscal policy and support the actualization of the revenue projections of the government. As with recent amendments, circa 14 laws were amended including the Capital Gains Tax Act, Companies Income Tax Act, Industrial Development (Income Tax Relief) Act, Personal Income Tax Act, Tertiary Education Trust Fund (Establishment, ETC.) Act, Customs and Excise Tariff, ETC (Consolidation) Act, Value Added Tax Act, Stamp Duties Act, Federal Inland Revenue Service (Establishment) Act, Nigerian Export Processing Zones Act, Oil and Gas Export Free Zone Act, Companies and Allied Matters Act, Fiscal Responsibility Act, Public Procurement Act, and specific provisions were enacted through the Establishment of Crises Intervention Fund and Unclaimed Funds Trust Fund. It is equally worthy of commendation that the process of enacting this new legislation was done promptly allowing for its implementation at the beginning of the new fiscal year. This notwithstanding, we advise that in proposing future amendments, stakeholders-wide consultations should be activated early to allow for more comprehensive and inclusive comments. An important take-away from this new Act is the concerted move by the government to reform the fiscal policy space to hinge against the shocks that the COVID-19 Pandemic has continued to have on economies all the world over, Nigeria inclusive. As part of CITN’s contribution towards expanding the frontiers of knowledge and promoting a tax-driven economy for our nation, we have reviewed the Act, its implication for the various sectors, its potential for enhancing the ease of doing business, promoting investment and possible areas for future amendments. Stakeholders’ comments were also reviewed and documented in this publication to provide an encompassing and wide spectrum review of the Act. We hope that this publication will be of immense benefit to those who seek knowledge and a better understanding of our tax legislation.
Keywords: Finance Act 2020, Tax Policy, Nigerian Tax Laws, Tax law amendment
JEL Classification: K34
Suggested Citation: Suggested Citation