Nigeria’s new Companies and Allied Matters Act 2020 has the potential of bringing the country’s business environment up to speed with the rest of the world and promote ease of doing business, analysts at the Franco Nigerian Chamber of Commerce and industry/Aelex webinar have said.
However, for the law to have the desired effect, they said there are some rules that conflict with already existing law – the Finance Act 2019 – such as the definition of small companies and rules guiding the filing of annual returns and these should be amended so the law can achieve its goals.
The webinar which held on September 16, had on the panel Yewande Sadiku, CEO Nigerian Investment Promotion Commission, Laurence Monmayrant, French Consul general in Nigeria.
Other panel members include Asiata Agboluaje, senior manager, Tax department Deloitte and Touche, Peter Nwofia, partner, Tax & Regulatory Services, Mazars Nigeria, Peter Ango, associate director, Andersen Tax, Nigeria and Davidson Oturu, Partner at Aelex law firm.
The panel members agreed that CAMA 2020 will significantly improve company administration in Nigeria but certain conflicting sections with the Finance Act 2019 would require amendments.
The Finance Act 2019 defines small companies as those with turnover of N25million and below whereas in the CAMA 2020 defines small companies as those with turnover of not more than N120million and net assets not exceeding N60m
“For me N120m is a more realistic revenue threshold when compared to the N25million threshold in the finance act 2019” said Nwofia, “This is because it will admit more companies who are still trying to find their feet in the economic space.”
Nwofia further said that CAMA 2020 has come to exempt small companies from appointing statutory auditors allowing them to file a modified financial statement to reduce the cost burden of appointing and remunerating auditors and filing annual returns, however, the finance act 2019 exempts companies of revenue threshold of N25M, it did not exempt them from filing annual returns.
“Essentially, the Finance act 2019 has watered down the intention of reducing the burden of paying taxes on small business in Nigeria. I will recommend that the tax authorities and the national assembly should quickly amend the tax laws in terms of CAMA 2020,” said Nwofia.
In her welcome address, Monmayrant commended the work done by the Federal Government through agencies like the NIPC, the ease of doing business council and the lawmakers to bring this new CAMA 2020 Act into reality.
“This new act makes a strong case for the ease of doing business drive of Nigeria while making issues of business governance less complex.
“What France and more generally foreign companies are looking at before choosing a new destination country is freedom of trade and industry, especially in foreign trade, transparency and respect of contracts and intellectual property, stability and predictability of the business environment as well as efficient transport facilities in an improved business environment.
“French companies are ready to invest in Nigeria and bring tindhe know-how so the country can develop its own industry and diversify its own economy
According to Sadiku, it was the objective of improving the business environment in Nigeria that led to the enactment of the finance act and CAMA 2020.9.18
“The Finance Act reviewed taxation for smaller companies to give them a greater opportunity for survival. It reviewed stamp duties and Custom duties and removed tax burden on SMEs,”
Sadiku said that CAMA 2020 will also change the investment landscape, through the provision of single-member or single shareholder of private companies, replacement of authorised share capital with the minimum, the exemption from appointing auditors, the provision for electronic filing, electronic share transfers, electronic meetings, the reduction of filing fees, the exemption from the appointment of company secretaries, the enhancement of minority shareholders protection rights, the business rescue provisions and the introduction of statement of compliance
“We think these features of the new CAMA should help make it easier for new companies to be birthed in Nigeria and for young companies in Nigeria to survive the difficulties companies face at the beginning of their lives,” Sadiku said.
