Federal Government has proposed N500 billion Crisis Intervention Fund to be provided in the Consolidated Revenue Fund and (the Special Account). This is contained in Finance Bill, 2020 presently before the National Assembly.
When approved by the National Assembly, the Fund would be captured in the annual Appropriation Act (budget) to meet any crisis related expenditure or other such exigencies that may arise pursuant to section 12 of the Fiscal Responsibility Act (as amended) and section 306 of the 1999 Constitution (as amended).
The Finance Bill 2020 has also proposed to exempt minimum wage earners from Personal Income Tax (PIT) and small companies from paying tertiary education trust fund tax by altering section 1 of the Tertiary Education Trust Fund Act.
The Minister of Finance, Budget and National Planing, Zainab Ahmed made this known on Friday in Abuja at a public hearing on the Finance Bill 2020 organised by the House of Representatives Committee on Finance.
Ahmed explained that the Bill intends to introduce reforms that would enable the country meet the current economic challenges occasioned by the COVID-19 pandemic.
According to her, an amendment is being proposed to grant tax relief to companies that donated COVID-19 relief funds to government to encourage such gestures in the future.
The Minister also said the Bill seeks to address issues that were lacking in the 2019 Finance Bill, explaining that the principle that guided the proposed law is need to adopt critical counter-cyclical fiscal policy to be able to adequately respond to current economic challenges .
She said: “We also need to defer tax rate increases to the domestic economic sufficiently recover and reduce compliance burden on tax payers in line with the ease of doing business reforms
“The second principle is the need to reform fiscal incentives policies to help reduce proliferation of fiscal incentives by carefully assessing cost vs benefit of tax incentives and prioritize job creation, growth and incentives.
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“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 said an amendment of the Company and Allied Matter Act was being proposed for the creation of an unclaimed dividend and unutilised bank balance trust fund, stressing that dividend declared and unclaimed fund would be warehoused and owed as a perpetual debt to shareholders.
“It is proposed that such unclaimed dividend should be handed over to government as trustees in the fund created under the supervision of the Central Bank of Nigeria (CBN) and Dept Management Officer (DMO),” she said.
She said sections 8, 25, 26, 39, 50 and 69 of the Federal Inland Revenue Service (FIRS) Act will be amended to give powers to the service to introduce technologies for tax collections and to punish staff that divulge taxpayers confidentiality.
While declaring the public hearing open, Gbajabiamila said, though the Bill was only transmitted to the House about one week ago, the House would give it speedy passage after subjecting it thorough scrutiny.
He said: “The Finance Bill, 2020 seeks to support the implementation of the 2021 Budget by proposing key reforms to specific taxation, customs, excise, fiscal and other laws”, adding that funding the budget to support economic recovery and address other challenges, was the reason the House gave immediate attention to the Bill.
“The Finance Bill which we have gathered here to consider and to contribute to, will determine amongst other things, our ability as a nation to fund the 2021 budget, meet the obligations of government and implement policies to build infrastructure, address the problem of insecurity, grow the economy, and provide jobs that pay a living wage and lift families out of poverty.
“It is an important piece of legislation, deserving of thorough consideration, and reasoned debate by the parliament of the people, acting in the best interests of the people.
Earlier Chairman, House Committee on Finance, James Faleke, said the proposed amendments to 18 tax-related and dividend laws were in line with the Legislative Agenda of the 9th House.
Faleke said: “The 9th House of Representatives in its legislative Agenda clearly identified as a priority to “Conduct a review of all Federal tax laws to encourage investment; to incentivize enterprise; ensure fairness and curb tax avoidance and evasion through the use of ICT in tax collection and administration.
“As encapsulated in the 9th House of Representatives Legislative Agenda, the priority economic strategic goals for the House of Representatives include the creation of an inclusive, thriving and resilient economy for Nigerians, attainment of substantive reduction in the percentage of poor and unemployed Nigerians.”
