Question

Discuss the Nigerian
2020 finance bill

Answer 1

Nigerian Finance Bill 2020

Nigerian economy is a mixed economy in terms of income and market. To the world, Nigeria is an emerging market and there are chances of growth in manufacturing and service industry. Also Nigeria is 27th ranked in terms of GDP at 27th place and one the important economy in Africa. Agriculture in Nigeria contributes about 18% to total GDP. Main challenges for Nigerian government is improving the agricultural products and arrange job for it's people because unemployment is still one of the major concern in the country.

The major concentration of Finance Bill 2020 is on Employment/Job Creation and Increase the GDP to sustain the current rate of growth. The key priorities as per Finance Bill 2020 are as mentioned below.

1. Fiscal Consolidation & strengthening the macro economy

2. Investment in Infrastructure and human capital and skill development

3. Prioritize the private sector with lucrative schemes

4. Investment in social enhancement program to improve the life of backward and poor

Now, let us wee the major changes in this Bill and its impact as shown below

A. Direct Tax (VAT) raised from 5% to 7.5%. This will put additional pressure on already depressed economy.

B. Introduction of Petroleum tax exemption- This is to support and increase production of Petroleum and Petroleum products

C. Any transaction above NGN10000 will attract NGN50 charges- This will increase collection of government and which may be used for social welfare programmes.

D. Increase in late filing of tax to NGN50000 and NGN25000 per month for subsequent months - This will again increase the government receipt to be used for developmental programmes.

Finally, the key features of Nigerian Finance Bill 2020 can be summarized as below

1. This bill is aggressive towards various tax collection by way of VAT and other taxes.

2. Since the bill is passed in first month of new year, it will attract various foreign investment.

3. Oil production will increase which in turn result in collection of foreign exchange. Also cost of transportation will bring down and ultimately prices will be cheaper.

Conclusion

The Nigerian Finance Bill 2020 is a bill with future growth and increased GDP. Increase in government revenue etc shall help to place the developmental programmes by Federal government.