Anticipating the Impacts of the Finance Act 2022 on Nigeria’s Fiscal Landscape.

Introduction: Each year, the Fiscal Policy Reforms Committee (FPRC), acting under the Minister of Finance’s directive, revises the Finance Act to adapt to evolving economic conditions. This aligns with the National Tax Policy’s 2017 objective of maintaining a flexible fiscal environment. The journey to enhance Nigeria’s fiscal regime began with the 2019 Finance Act, continuing annually. Currently in progress is the Finance Act 2022, slated for implementation in the 2023 financial year. Amendments and Scope: The Finance Act traditionally amends both tax and non-tax statutes related to taxation. Past acts have affected various laws, including the Companies Income Tax Act, Value Added Tax Act, and Customs and Excise Tariff Act. The upcoming Finance Act, 2022, is expected to impact diverse legislations. Policy Focus Areas of FA22: The FPRC and the Ministry of Finance have outlined five policy focus areas for FA22. First, healthcare investments take precedence, intending to attract domestic and international investments in healthcare infrastructure. The Act may retain taxes such as the Sugar Tax to address health challenges. FA22 also aims to complement non-fiscal reforms for reducing Greenhouse Gas emissions, encouraging climate adaptation and mitigation investments, and fostering Green Growth economies. Another pivotal focus is reforming tax incentives to phase out outdated incentives for matured industries. FA22 aims to reduce tax expenditure, support economic reforms, and stimulate job creation and growth, particularly for SMEs, youth, and women-owned businesses. Additionally, the Act plans to deploy the NYSC Diaspora Scheme to create jobs and attract capital and IP investments in domestic SMEs. Alignment with National Developmental Plan: The Finance Act, 2022, aligns with the National Development Plan 2021-2025 (NDP). The NDP addresses challenges in healthcare financing, climate change, and gender equity. FA22’s focus on healthcare investments resonates with the NDP’s strategies to optimize healthcare. Similarly, FA22 aims to introduce reforms to reduce Greenhouse Gas emissions, aligning with the NDP’s global solutions approach to climate change. Lastly, the Act is expected to contain fiscal policy reforms supporting women-owned businesses, aligning with the NDP’s gender equity goals. Conclusion: Building on the transformative reforms introduced by previous Finance Acts, the Finance Act 2022 is anticipated to play a crucial role in promoting fiscal equity and aligning local tax legislation with global best practices. The Act is expected to address contemporary challenges, making significant contributions to Nigeria’s economic development and stability. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, You can also reach us via WhatsApp at +2348038460036.