OrderPaperToday – The federal government on Monday gave firm indications of tax increases as part of plans to diversify the economy and shift focus from oil revenues to enable it fund critical projects.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, made this disclosure at a public hearing organized by the House of Representatives Committee on Finance to deliberate on the 2021 Finance Bill, held at the National Assembly Complex, Abuja.

Recall that President Muhamadu Buhari had on December 2, 2021 transmitted to the House of Representatives, the 2021 Finance Bill, and sought a speedy passage of the legislation to support the implementation of the N16.39 proposed 2022 budget.

--Sponsored Content --

The Finance Bill proposes key reforms with a focus on taxation; Customs and Excise duties, and other relevant fiscal instruments, to enhance domestic revenue mobilisation efforts.

The Bill highlights tax increases, non-tax revenues and general tax administration as well as legislative drafting reforms, particularly to support the on-going automation reforms by the Federal Inland Revenue Service (FIRS) as priority areas.

The Minister also informed that federal government’s retained revenue was N4.56 trillion (75% of budget) as at September 2021; federal share of oil revenues – N845 billion (56.3% pro-rated performance); N1.31 trillion (117.3% above budget) as federal share of non-oil revenues; N616 billion and N274.4 billion (121% and 153% of pro-rata targets) of Companies Income Tax (CIT) and Value Added Tax (VAT) and N418 billion Customs collections for the period under review.

She also told the lawmakers of the possibility of introducing new tariffs and levies in 2022 as the economy continues to recover, saying modest changes had been proposed but more fiscal reforms were still in view as the ministry could not take all the proposals collected from stakeholders.

Ahmed further explained that there were on-going legal cases in court against the federal government on the Value Added Tax (VAT) and Stamp Duties which was why the ministry stayed off on those areas.

She however, expressed hope that by mid-2022, the cases might have been dispensed with and then reforms in those areas could be proposed for parliament to consider.

“We prepared this draft bill along five reform areas: the first domestic revenue mobilisation, the second is tax administration and legislative drafting, third is international taxation, fourth is financial sector reforms and tax equity and fifth is improving public financial management reform.

“The provision in the draft bill is proposing to amend the Capital Gains Tax Act, Company Income Tax, FIRS Establishment Act, Personal Income Tax, Stamp Duties Act and Tertiary Education Act, Value Added Tax, Insurance Police Trust Fund, and the Fiscal Responsibility Act.

“This is to amend the Police Trust Fund Act and the Nigerian Trust Fund Acts, the purpose is to empower the FIRS to collect the Nigerian Trust Fund levies on companies on behalf of the fund itself.

“Currently, because there is no such provision, the FIRS is unable to start collecting on behalf of the fund. Also, it is to streamline the tax and the levy collection from the Nigerian companies in line with Mr. President’s administration ease of doing business policy.

“So we do not have NASENI going out to collect that tax, the FIRS will collect on their behalf during their collection process and it will be passed through to them,” the Minister said.

Earlier, Speaker of the House, Femi Gbajabiamila, in his opening remarks, said the 2021 Finance Bill seeks to introduce strategic and broadminded, positive reforms that will engender best practices and guarantee interest of the investing public and businesses.

The Speaker who was represented by Minority Leader, Ndudi Elumelu, said the Bill seeks to statutorily check borrowing by Local, States and Federal Governments in other to promote transparency and accountability in the administration in various strata of tax and public revenue generation.

“It is instructive to state that the essence of the 2021 bill is to further reposition our finance system to plug wastes, close openings for corruption, create opportunities for employment as well as stimulate stability and growth in our productive sectors, within the wider context of our quest for economic recovery in our country.

“Given the democratic credentials of the House of Representatives under my watch as well as the need to further deepen the credibility of the process through wider participation of stakeholders, this stakeholders meeting has been designed to give Nigerians and critical stakeholders in the industry the ample opportunity to own and drive the process.

“We must strengthen the institution to strategically check reckless borrowings by ensuring accountability in the use of borrowed funds and ensuring that the borrowings shall be on concessional terms or at relatively low interest rates and subject to the rigorous of legislation,’’ he said.

Sponsored

LEAVE A REPLY

Please enter your comment!
Please enter your name here