| MAY 2023 – NIGERIA THE BUSINESS FACILITATION (MISCELLANEOUS PROVISIONS) ACT (BFA), 2023 It is important that employers note the following: The BFA and its effect on the National Housing Fund Act |
The Business Facilitation (Miscellaneous Provisions) Act, 2023 was signed into law by President Muhammadu Buhari on 13 February 2023.
The BFA 2023 is a legislative intervention by the Presidential Enabling Business Environment Council (PEBEC), geared to creating an enabling environment for businesses to thrive without unnecessary restrictions. The Act has amended various business-related laws. Some of these include: the Companies and Allied Matters Act, 2020, Customs and Excise Management Act, the Financial Reporting Counsels Act, the Immigration Act, the Investment and Securities Act, the National Office for Technology Acquisitions and Promotion Act, Trade Mark Act, Standard Organization of Nigeria Act, Nigerian Investment Promotion Commission Act and National Housing Fund Act.
We highlight the amendments of the BFA to the National Housing Fund (NHF) Act 1992, particularly with reference to the regulation of contributions made to the NHF by private sector employers of labour in Nigeria.
Under the NHF Act, every Nigerian in the public and private sector earning an equivalent of the national minimum wage or above is required to contribute 2.5% of their monthly basic salary into the NHF, managed and administered by the Federal Mortgage Bank of Nigeria. The funds mobilised are then made available through the bank to contributors to own houses at affordable interest rates. By the Act, employers are required to deduct the prescribed rate of contribution from the monthly salaries of qualifying employees and remit same to the bank.
The above requirement has now been altered by section 45 of the BFA which effectively amends section 4 of the NHF Act.
By the amendment, only employees earning the national minimum wage and above in the public sector, as well as self-employed individuals, are required to contribute 2.5% of their monthly income to the fund.
Consequently, private sector employees are now excluded from compulsory compliance with this obligation and may henceforth contribute the requisite 2.5% of their monthly income to the NHF voluntarily.
An interest rate of 2% per annum (previously 4% per annum), or as may be determined by the Bank, will be payable on the contributions made.
Any contributor who has not obtained a housing loan from the bank and has attained the age of 60 years or 35 years of service will be eligible to a refund of his/her contribution.
To view the Business Facilitation Bill, 2022, follow the link.
Contact our legislation team on info@crs.co.za if you require any additional information.
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