Sustainable Business Practices: Incorporating Environmental Levies from Finance Act 2020.

3 ways to create sustainable business practices for a greener future


Sustainability has become a central theme in global business, driven by growing awareness of environmental challenges and the need for responsible corporate practices. In Nigeria, the Finance Act 2020 introduced a significant change by incorporating environmental levies aimed at promoting environmentally friendly practices. This article explores the implications of the Finance Act 2020’s environmental levies and how businesses can incorporate sustainable practices into their operations.

Environmental Levies in the Finance Act 2020:

  • Plastic Bag Levy: The Finance Act 2020 introduced a levy on the use of plastic bags by consumers in retail and wholesale transactions. It imposes a fee of ₦10 on each plastic bag provided by retailers.

Implication: Retail businesses must account for this levy when providing plastic bags to customers, encouraging the reduction of single-use plastics.

  • Levy on Vehicles with Internal Combustion Engines: The act imposes a levy on vehicles with internal combustion engines, targeting emissions from fossil fuel-powered vehicles.

Implication: Vehicle importers and manufacturers need to assess the levy’s impact and potentially shift towards more sustainable vehicle technologies.

  • Levy on Non-Recyclable Plastic Bottles: A levy is introduced on non-recyclable plastic bottles, encouraging the use of recyclable materials in packaging.

Implication: Companies in the beverage industry should consider sustainable packaging options to reduce the impact of this levy.

  • Air Pollution Levy: The act imposes a levy on air pollutants generated from industries and manufacturing activities, aiming to reduce emissions and promote cleaner production.

Implication: Industrial and manufacturing companies need to invest in emission control technologies and sustainable production methods to minimize the levy’s impact.

Incorporating Sustainable Practices:

  1. Reducing Plastic Usage: Businesses can reduce plastic bag levies by promoting the use of reusable bags and eco-friendly packaging options.
  2. Transitioning to Electric Vehicles: Consider incorporating electric or hybrid vehicles into your fleet to mitigate the impact of the vehicle levy while reducing emissions.
  3. Sustainable Packaging: Invest in sustainable packaging materials and practices to minimize the levy on non-recyclable plastic bottles.
  4. Emission Reduction: Implement cleaner production processes and technologies to reduce emissions and the air pollution levy.
  5. Renewable Energy Adoption: Shift to renewable energy sources to reduce energy-related emissions and contribute to a sustainable future.

Benefits of Sustainability:

  1. Cost Savings: Sustainable practices often lead to cost savings through reduced waste, energy efficiency, and resource optimization.
  2. Reputation and Brand Image: Embracing sustainability enhances a company’s reputation and brand image, attracting environmentally conscious consumers.
  3. Compliance and Risk Mitigation: Compliance with environmental levies and sustainable practices mitigates regulatory risks and potential penalties.
  4. Competitive Advantage: Sustainable businesses gain a competitive edge in an environmentally conscious market.


The Finance Act 2020’s environmental levies reflect Nigeria’s commitment to sustainable practices and environmental responsibility. Businesses that incorporate sustainable practices not only comply with these levies but also position themselves as responsible corporate citizens. By reducing plastic usage, transitioning to cleaner energy sources, and adopting sustainable packaging, companies can not only minimize the financial impact of these levies but also contribute to a greener, more sustainable future.

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.