The Senate on Thursday passed the Finance Bill 2019 and approved the 7.5 percent value Added Tax (VAT) proposed by President Muhammadu Buhari.
Buhari had asked for an increment of the value-added tax from 5% to 7 . 5 percent.
But while the Senate approved the new VAT, some Senators including the Minority Leader, Enyinnaya Abaribe , and Senators Ifeanyi Ubah, Gabriel Suswan and Abba Moro, however, raised objections to the bill
According to them, the increment in taxes would further compound the sufferings and pains of Nigerians.
Meanwhile, chairman of the Committee, Senator Olamilekan Adeola, while presenting the report, 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 said the bill sought to amend the provision of the Companies Income Tax Act by curbing Base Erosion and Profit Shifting (BEPS) as proposed by the Organization for Economic Cooperation and Development (OECD) and broaden the triggers for domestic taxation of income earned by non-resident companies in Nigeria through dependent agents and via online market platforms.
Also, that the bill would address the taxation of industries, such as insurance, start-ups and the capital markets, deemed by the Federal Government of Nigeria as critical to the growth and development of the Nigerian economy.
“The bill proposes to improve the efficiency of the Nigerian VAT system taking into consideration recommendations from various stakeholder groups.
“The Bill was a welcome development and the consensus view was that its proposals and principles should be sustained, subject to the specific recommendations of the Committee,” Adeola said.
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 the government to provide services and infrastructure to the citizens of this country”.
