The 2019 Finance Act recently given by the Mr President has undoubtedly been a heated topic of debate among Business and Legal commentators. The reason for the discourse mostly being centered around the 50% increment of Value Added Tax (VAT) rate from 5% to 7.5% and its effects on the ease of doing business in Nigeria among other provisions contained.
The Act on the 13th of January 2019, was signed by the President into law but worthy of mention is the salient omission of a "Commencement date" from which the Act and its provisions begin to take effect. With this omission the most important question for Startups, SME's, Large Companies and Multi-nationals would be the exact date from when Regulatory bodies such as the FIRS and Tax regulators at the State level would require compliance.
Some commentators have argued for the 1st of January 2020 which was initially intended for commencement along with the 2020 Appropriation Act while others have argued for the date the Finance Act is published in the Federal Gazzette.
However as a guide to grey areas of this nature, the Interpretation Act, CAP 123 LFN, 2004 provides explicitly under Section 2 that:
- An Act is passed when the President assents to the Bill for the Act whether or not the Act then comes into force;
- Where no other provision is made as to the time when a particular enactment is to come into force, it shall, subject to the following subsection, come into force-
- in the case of an enactment contained in an Act of the National Assembly, on the day when the Act is passed;
It is therefore without uncertainty that the appropriate commencement date of the 2019 Finance Act is the 13th of January 2020, the date on which the Bill was assented to by Mr President and the same will be the effective date of commencement from which business organizations would be required to comply with the newly introduced provisions of the Law.
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