Chinyere Ossy-Okoye (Lead Author) & Uchechukwu Amaefule
Introduction
The Finance Act 2020, was assented to, President Muhammadu Buhari on the 31stday of December 2020 (the “Act”). The Act is a fiscal legislation recently introduced, to be updated annually, in a bid to help itemize and provide guidelines on some of the tax laws, regulations, rates, levies and incentives applicable to the business environment for the fiscal year. Some of the statutes amended the Act include; Capital Gains Tax Act, Companies Income Tax Act, Personal Income Tax Act, Customs and Excise Tariff etc.(Consolidated) Act, Value Added Tax Act, Nigeria Export Processing Zones Act, Oil and Gas Export Free Zone Act, Industrial Development (Income Tax Relief) Act, Stamp Duties Act, Tertiary Education Trust Fund(Establishment) Act, Federal inland Revenue Service (Establishment) Act, Fiscal Responsibility Act, Public Procurement Act, and Companies and Allied Matters Act.
The Act reviews and amends several tax legislations and so doing, it consolidates into one statute, several tax provisions from different tax statutes. The main thrust of the Act is to increase revenue of the Federal government and to curb avenues which tax has been evaded and avoided over the years. One of the most controversial provisions of the Act is the provision of section 77 which authorizes the Federal Government to compulsorily acquire from companies and banks, any unclaimed dividend and unutilized funds in a dormant account which have been so unclaimed or unutilized for a period not less than six years. Some scholars have argued that this provision threatens the sanctity of contract and thus initiates a likely breach of contract between the customer and the bank on one hand and the shareholders and companies on the other hand to manage their funds. There is also a constitutional perspective to it; while the federal government has relied on their constitutional right of compulsory acquisition, it has been submitted that this provision of the Act infringes on the fundamental right of individual to own property and be adequately compensated in case of compulsory acquisition. Although the Act provides that, such funds compulsorily acquired the federal government is to be claimed their owners with interest, the act did not state with exactitude the percentage of interest accruable and time limit for payment of such interest nor are there any court order to that effect. The Act is still nascent. It is hoped that the court would introduce or more preferably, certain policies would be put in place to bring more clarity to the provision.
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