Finance Act 2020 And Its Impact On Small And Medium Scale Enterprises

In this article, we have reviewed these amendments and highlighted how it impacts the Small and Medium Scale Enterprises (SMEs).

One major focus of the President Muhammadu Buhari led administration is to improve the ease of doing business and encourage the tax and fiscal responsibility in Nigeria. To achieve this, the government has over the last two years, through the Finance Act 2019 and 2020 (FA 2019 & FA 2020) amended various tax and fiscal legislations to align the Nigerian business environment with global standards.

One of such amendments is the categorization of companies into small, medium, and large companies, based on annual gross turnover as seen in the Finance Act 2019 (FA 2019). Small companies are companies with annual gross turnover below N25 million; medium size companies have annual gross turnover of N25 million and above but below N100 million, while large companies are those with annual gross turnover of N100 million and above.