Nigerians are indeed in for the best of days as President Muhammadu Buhari is walking his talk, more so with the Senate on Thursday passing President’s Finance Bill, 2019, which seeks an amendment of Nigeria’s tax laws. This is a giant leap for Nigeria’s economy. Once the House of Representatives rounds off their deliberations, it is expectedly to also passed the Bill.
It is a peoples Bill considering the expansion of VAT exemption list which includes:
basic food items (agro and aqua based staple foods) such as additives, cereals, cooking oils, culinary herbs, fish of all kinds (other than ornamented), flour and starch, fruits, live or raw meat and poultry, milk, nuts, pulses, roots, salt, vegetables, and water; Locally manufactured sanitary towels, tuition (primary, secondary and tertiary education); and services rendered by Microfinance Banks.
The Honourable Minister of Finance Budget and National Planning, Mrs Zainab Shamsuna Ahmed, has expressed her happiness about the passing of the 2019 Finance Bill by the Senate of the Federal Republic of Nigeria.
According to the Ahmed, “The passing of the Bill by the Senate is an important step for Nigeria as it sets the tone for our quest to run annual budgets with revenue largely from non-oil sector rather than from the volatile oil sector” Ahmed added that, she is looking forward to the House of Representative’s very important contribution to this process by passing the Finance Bill.
According to the Bill, a large sum of money realised from the taxation would go to the people; the States and the Local Governments Areas (LGAs) are to get 50% and 35% respectively while 15 percent will go to the Federal Government.
The passage of the Bill follows the consideration of the report of the Senate Committee on Finance. In his presentation of the report, Chairman of the Committee, Senator Olamilekan Adeola, said the Bill specifically seeks to amend Nigeria’s tax provisions and make them more responsive to the tax policies of the Federal Government, among other things. He added that the amendment and passage of the Finance Bill would enhance the implementation and effectiveness of government’s tax policies.
According to Adeola, the initiative to reform the tax system and the proposed modifications to the fiscal rules around taxation are clearly aimed at creating an enabling business environment aimed at minimizing the tax burden for Micro, Small and Medium Enterprises (MSMEs).
The Acts amended in the Finance Bill are: Companies Income Tax Act, Cap C21 2004 (as amended to date); Value Added Tax Act, Cap VI, LHN 2007 (as amended), and Customs and Excise Tariff (Consolidation) Act, Cap C49, 2004.
Others are: Personal Income Tax Cap P8, LFN 2007 (as amended); Capital Gains Tax Act Cap C1, LFN 2007; Stamp Duties Act Cap S8, LFN 2004, and the Petroleum Profit Tax Act (PPTA) 2004.
Senator Adeola further said that the Finance Bill, as amended, would promote fiscal equity by mitigating instances of regressive taxation, as well as introduce tax incentives for investment in infrastructure and capital markets.
He added that the Bill, when signed into law by the President, would support small businesses in line with the on-going “Ease of Doing Business Reforms” and raise revenues for the Government.
In his concluding remarks, after the clause-by-clause consideration, President of the Senate, Ahmad Lawan, said the Bill’s passage by the Senate was intended “to ensure that we (National Assembly) streamline the tax system in Nigeria and get revenue for government to provide services and infrastructure to the citizens of this country.
“What we have done is very significant because this is to ensure we not only have credible and reliable sources of funding for the 2020 Budget, but also for subsequent activities of government.
The revenue generating agencies will have to sit up. The National Assembly, particularly the Senate, will be mounting a lot of oversight on the revenue generating agencies. If they have targets, we must ensure they meet these targets. What we intend to do is to engage the revenue generating agencies on a quarterly basis to evaluate their performance on revenue generation, and to identify if there are challenges and how we can achieve better outcomes,” he said.
“I believe what we have done is not to put tax burdens on the ordinary people. What we have done is to create more revenues to provide services and infrastructure for Nigerians, including the ordinary people. This exercise was done in a bi-partisan manner, and that is what we are known for,” Lawan further said.