An Analysis of the Implications of 2020 Finance Act on the Nigerian Economy

Abstract

The need to rejig Nigeria’s economy, particularly in this era of the pandemic, cannot be overemphasized. The main objective of this exploratory paper is to highlight some key provisions of the Finance Act 2020, as part of efforts towards realizing government’s goal. It also examines the implications that those provisions would have on citizen, businesses, government revenue and the Nigerian economy at large. The desk based approach is adopted in this paper. The areas discussed in this paper include VAT exemptions for flight tickets, land and building; dormant balances and unclaimed dividends; virtual tax appeal hearings and reduction of minimum tax payable; Electronic money transfer levy and, PAYE exemption for low income earners. Other provisions highlighted include submission of financial statements by small companies, compensation for loss of office,
exemptions for free trade zone companies, establishment of Crisis Intervention Fund and other dedicated taxes accounts, as well as the issue of taxable supply by non-residents. The findings of the paper reveal that the 2020 Finance Act would definitely have some pros and cons on the revenue and the economy of the country. It concludes that majority of those provisions would exert positive direct and indirect effect on the economy of Nigeria while few portend some negative effects. This fact necessitates recommendable caution and periodic evaluation as the Act is being implemented, so that necessary amendments are considered, where such need arises.