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Nigeria: Tax provisions in proposed Finance Bill 2020

Nigeria: Tax provisions in proposed Finance Bill 2020

The Finance Bill, 2020 includes the following tax provisions:

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  • A 50% reduction in the minimum tax rate from 0.5% to 0.25% of gross turnover for financial years ending between 1 January 2020 and 31 December 2021
  • An exemption from having to pay tertiary education tax by small companies with turnover of less than ₦25 million
  • Tax relief for companies that donate to a coronavirus (COVID-19) relief fund
  • Software acquisition to be treated as a qualifying capital expenditure
  • Clarification of the amount of compensation for “loss of office” that is exempt from tax
  • Reduction to the rate of import duties on tractors and motor vehicles (to 10% and 5%, respectively)


What’s next?

The Federal Executive Council approved the bill on 18 November 2020, and the bill was presented to the state governors on 19 November 2020. It is expected that the bill would be presented to the National Assembly for review and passage (along with the 2021 budget and the 2021 Appropriation Act).

Read a November 2020 report [PDF 558 KB] prepared by the KPMG member firm in Nigeria 

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

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