FG Replaces Stamp Duty With N50 Electronic Transfer Levy

By Sanya Adejokun

Consequent upon the outlawing of stamp duty on electronic bank
transfer by the Court of Appeal, the Federal Government, through
the Finance Act 2020, has introduced Electronic Money Transfer
Levy.

Finance Act 2020, which was recently signed by President
Muhammadu Buhari, has a commencement date of January 1, 2021 along
with the 2021 Appropriation Act.

The new law stipulates payment of N50 levy on every electronic
money transfer deposited in any bank or financial institution on
any account on the sum of N10,000 or more.

Like Value-Added Tax (VAT), states will benefit more from the
accruing revenue at a ratio of 85 per cent, while the Federal
Government and Abuja will share the remaining 15 per cent.

The Act also reduces import duty on tractors from 35 to five per
cent; mass transit vehicles for transport of more than 10 persons
and trucks from 35 per cent to 10 per cent; and reduction of import
levy on cars from 30 per cent to five per cent.

This development, according to experts, is to redirect traffic
of these vehicles from other ports in West Africa to Nigeria.

Finance Act 2020 made the cost of donation made in cash or kind
to any fund set up by the government in respect of any pandemic or
natural disaster to be tax deductible subject to a maximum of 10
per cent of assessable profit after other allowable donations.

Overall, the act introduced over 80 amendments to 14 different
laws.

Overall, the new law removed some tax burden on individual and
small businesses while redefining others.

For instance, workers earning N30,000 minimum wage or less have
been exempted from personal income tax, while commercial airline
tickets will no longer attract VAT.

The Act states provides that: “Compensation for loss of office
up to N10m exempted from capital gains tax. Tax due on excess above
N10m is to be deducted by the payer and remitted within the time
specified under the PAYE Regulations.

“Minimum tax for companies in respect of returns for years of
assessments due between 1st Jan, 2020 and 31st Dec, 2021 has been
reduced from 0.5% to 0.25% of gross turnover less franked
investment income.”

Culled from Nigeriantribune

By Sanya Adejokun

Consequent upon the outlawing of stamp duty on electronic bank
transfer by the Court of Appeal, the Federal Government, through
the Finance Act 2020, has introduced Electronic Money Transfer
Levy.

Finance Act 2020, which was recently signed by President
Muhammadu Buhari, has a commencement date of January 1, 2021 along
with the 2021 Appropriation Act.

The new law stipulates payment of N50 levy on every electronic
money transfer deposited in any bank or financial institution on
any account on the sum of N10,000 or more.

Like Value-Added Tax (VAT), states will benefit more from the
accruing revenue at a ratio of 85 per cent, while the Federal
Government and Abuja will share the remaining 15 per cent.

The Act also reduces import duty on tractors from 35 to five per
cent; mass transit vehicles for transport of more than 10 persons
and trucks from 35 per cent to 10 per cent; and reduction of import
levy on cars from 30 per cent to five per cent.

This development, according to experts, is to redirect traffic
of these vehicles from other ports in West Africa to Nigeria.

Finance Act 2020 made the cost of donation made in cash or kind
to any fund set up by the government in respect of any pandemic or
natural disaster to be tax deductible subject to a maximum of 10
per cent of assessable profit after other allowable donations.

Overall, the act introduced over 80 amendments to 14 different
laws.

Overall, the new law removed some tax burden on individual and
small businesses while redefining others.

For instance, workers earning N30,000 minimum wage or less have
been exempted from personal income tax, while commercial airline
tickets will no longer attract VAT.

The Act states provides that: “Compensation for loss of office
up to N10m exempted from capital gains tax. Tax due on excess above
N10m is to be deducted by the payer and remitted within the time
specified under the PAYE Regulations.

“Minimum tax for companies in respect of returns for years of
assessments due between 1st Jan, 2020 and 31st Dec, 2021 has been
reduced from 0.5% to 0.25% of gross turnover less franked
investment income.”

Culled from Nigeriantribune