The Federal Government has made plans to replace the collection of stamp duty with an electronic bank transfer after the Court of Appeal outlawed the duty in a recent judgment.
The Electronic Money Transfer Levy which kicked off on January 1, is contained in the new Finance Act 2020 signed into law by President Muhammadu Buhari along with the 2021 Appropriation Act.
The new law stipulates the payment of N50 levy on every electronic money transfer deposited in any bank or financial institution on any account on the sum of N10,000 or more.
Just like the Value-Added Tax (VAT), states will benefit more from the accruing revenue at a ratio of 85 per cent, while the Federal Government and the Federal Capital will share the remaining 15 per cent.
The Act also reduces import duty on tractors from 35 to five per cent; mass transit vehicles for transport of more than 10 persons and trucks from 35 per cent to 10 per cent; and reduction of import levy on cars from 30 per cent to five per cent.
This development, according to experts, is to redirect traffic of these vehicles from other ports in West Africa to Nigeria.
The Finance Act 2020 also made the cost of donation made in cash or kind to any fund set up by the government in respect of any pandemic or natural disaster to be tax deductible subject to a maximum of 10 per cent of assessable profit after other allowable donations.
The Act further provides that compensation for loss of office up to N10m should be exempted from capital gains tax while tax due on excess above N10m is to be deducted by the payer and remitted within the time specified under the PAYE Regulations.
Minimum tax for companies in respect of returns for years of assessments due between January 1, 2020 and 31st Dec, 2021, has also been reduced from 0.5% to 0.25% of gross turnover less investment income.
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