His Excellency, the President of the Federal Republic of Nigeria, Muhammadu Buhari, GCFR on 8 October 2019, presented the 2020 Federal Government Budget proposals before a joint sitting of the National Assembly.
The Revenue and Expenditure budgets are ₦8.15 trillion and ₦10.33 trillion, respectively, resulting in ₦2.18 trillion fiscal deficit. Below are the key assumptions behind the Budget and movements in the proposed fiscal parameters between the 2019 and 2020 Budgets:
The President also presented a Finance Bill along with the Budget, for passage with the 2020 Appropriation Bill by the National Assembly. The Finance Bill seeks to achieve five strategic objectives of:
The Finance Bill, among other things, proposes an increase in the Value Added Tax (VAT) rate from 5% to 7.5%. The additional revenue from increase in VAT rate would be used to fund healthcare, education and infrastructure. The Government intends to mitigate the impact of the VAT rate increase by introducing a VAT exemption threshold for businesses with a turnover of less than N25 million per annum, and expanding the list of VAT-exempt items to include the following:
We will publish our 2020 Budget Newsletter after the Minister of Finance, Budget and National Planning submits the detailed budget.
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