Finance Minister, Dr. Zainab Ahmed yesterday disclosed that the 2020 Finance Bill before the National Assembly when passed into will exempt minimum wage earners from Personal Income Tax, PTI.
The Minister who disclosed this at a Public Hearing on the 2020 Finance Bill organized by the House Committee on Finance also disclosed that the federal government has no plan to introduce new taxes in 2021 explaining that the Bill will also exempt small companies from company income tax.
She said rather, the government is making efforts to reduce the tax burden on the Nigerian people in view of the current economic situation occasioned by the COVID-19 pandemic and the fall in the prices of crude oil in the international market.
According to her, the Bill will also make comprehensive reforms in the nation’s tax laws which according to her are aimed at exempting small companies from paying company income tax and that the Bill is expected to pave way for the government to generate revenue to fund the 2021 budget.
On his part, the Speaker of the House of Representatives, Hon. Femi Gbajabiamila assured of a quick passage of the Bill which he said was critical to the success of the 2021 budget as it made provisions to support the recovery of the Nigerian economy from the impact of the COVID-19 pandemic.
Speaking further, Ahmed said further that the major reason behind the Bill was to address issues that were lacking in the 2019 Finance Bill as well as deepen the innovations, adding that the 2020 proposal dealt largely with taxation and tax administration, adding that about 1740 persons representing various professional bodies, academics, International Development partners, civil society organizations, the private sector as well as key Federal Ministries, Departments and Agencies took part in the process of drafting the bill.
She also said that the draft bill was subjected to serious debate before the Federal Executive Council and to the National Economic Council before it was transmitted to the National Assembly.
According to her, the principle that guided the finance bill is the need to adopt critical counter-cyclical fiscal policy because we need to be able to adequately respond to economic challenges that are occasioned by the Covid-19 pandemic and the crash in crude oil prices.
She stressed that “We also need to defer tax rate increases to the domestic economic sufficiently recover and reduce the compliance burden on taxpayers in line with the ease of doing business reforms
“The second principle is the need to reform fiscal incentives policies to help reduce the proliferation of fiscal incentives by carefully assessing cost vs benefit of tax incentives and prioritize job creation, growth and incentives”.
She said further that “the government also need closer coordination of monetary, trade and fiscal, adding that this is necessary so that government will be able to align existing tax incentives for lending to agriculture with the recent CBN moratorium and interest rate reduction for agriculture and real sector loans, reform the stamp duty level on banking transaction and make provisions that will help harness funds in form of unclaimed dividends and an unclaimed bank balance that has been sitting idle”.
Ahmed stressed that when passed into law, the bill is expected to promote fiscal equity by removing double taxation on companies during commencement and cessation of business, simplify the basis for calculating minimum tax, and exempt profits that had been taxed from further taxation in the form of excess dividends.
The law she said aimed to align domestic tax laws with global best practices by introducing significant economic presence rules for taxation of non-resident companies, while also introducing tax incentives for infrastructure and capital market as well as support small business through tax exemption of small businesses from company income tax and reduction in VAT compliance burden for small companies.
The law will also increase revenue for the government as it supports the increase of VAT from 5 to 7.5 percent and will also introduce legislative backing for banks to charge stamp duties on electronic receipts.
She maintained that “What we don’t have in the finance bill 2020 is an increase in tax. There are no new taxes that are being introduced and there is no increase in taxes. There are also no new incentives that have been introduced in this bill and will introduce tax reform that has been introduced is geared towards supporting financial stimulus while there are also tax measures that are short, focused, and uncontroversial.
FOR INFORMATIONAL PURPOSES ONLY. The content of this Website is made available by the Nigerian Pilot Newspaper Publisher. This Website seeks to facilitate the dissemination of informative, engaging, and constructive news about events in Nigerian, Africa, and Globally as they happen. The “Distributer” of Information is the Nigerian Pilot Newspaper and Nigerian Pilot Tv brands of Dom Communication, LLC.
DISCLAIMER: FAKE NEWS PUBLICATION. This Website NigPilot collects information from several Independent Reporters and may contain unauthenticated and/or copyrighted materials the utilization of which has not generally been explicitly approved or authorized by the copyright proprietor. NigPilot with concern to increase in misleading social media publications, please report any such Fake, False, or Misleading News to [email protected] for immediate action.
FAIR USE NOTICE. In accordance with THE LAW, the material on this Website is included for informational and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond “fair use,” you must obtain permission from the copyright owner or Nigerian Pilot WEBMASTER. For Nigerian Pilot Newspaper Advert Rates Click Here!