President Buhari assented to the bill barely a month after its passage by the National Assembly and subsequent forwarding by the legislature to the President for assent.
Recall that President Buhari, while presenting the 2020 Appropriation Bill to the National Assembly, also presented the Finance Bill.
The President had explained that: “This Finance Bill has five strategic objectives, in terms of achieving incremental, but necessary, changes to our fiscal laws.
“These objectives are; Promoting fiscal equity by mitigating instances of regressive taxation; Reforming domestic tax laws to align with global best practices; Introducing tax incentives for investments in infrastructure and capital markets; Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and Raising Revenues for Government.
“The draft Finance Bill proposes an increase of the VAT rate from five per cent to 7.5 per cent, as such, the 2020 Appropriation Bill is based on this new VAT rate. ”
The Federal Executive Council (FEC) had on Wednesday, September 11, 2019, approved a 50% increase in the Value Added Tax (VAT) rate applicable on supply of goods and services in Nigeria, from five per cent to 7.5 per cent.
The new rate according to the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, is expected to take effect in the first quarter of 2020.
In a statement by the Special Adviser to the President, Media and Publicity, Chief Femi Adesina on Monday, with the assent, there will be more revenue to finance key government projects especially in the areas of health, education and critical infrastructure.
The President had earlier announced the signing of the law personally through his verified Twitter handle @MBuhari.
He said, “The Finance Bill, 2019 (the Bill), presented by President Muhammadu Buhari alongside the 2020 Appropriation Bill to a joint session of the National Assembly on 8 October 2019, was passed by both the Senate and the House of Representatives.
“The law seeks to amend the Petroleum Profit Tax Act, Customs and Excise Tariff Act, Company Income Tax Act, Personal Income Tax Act, Value Added Tax, Stamp Duties Act and the Capital Gains Tax.
” With the Finance Law, Nigerians who want to open or maintain accounts with the Deposit Money Banks will not have to provide their Tax Identification Number to do so.
” The Federal Government has also raised the threshold from which stamp duty will be charged for online transactions from the current N1,000 to N10,000.”
It will also be recalled that the Federal Government attempted to increase the VAT rate to 10 per cent in 2007, but this was faced with stiff opposition resulting in the suspension of the proposed increase.