The Senate Wednesday, passed for second reading , the Finance Bill 2020 it received from the Presidency on Tuesday for consideration.
This is as Senators during debate on the bill seeking amendments to some provisions in twelve different Acts , kicked against the existing tax regime making the poor subsidize the rich.
In his lead debate on the bill, the leader of the Senate , Senator Abdullahi Yahaya ( APC Kebbi North), said the the 2021 Appropriation Bill is based on the provisions of this Bill which aimed at generation of additional revenues to be used for funding of capital provisions component of health, education and other sectors of the economy.
According to him, the Bill seeks to amend the Capital Gains Tax Act; Companies Income Tax Act; Personal Income Tax Act; Tertiary Education Trust Fund (Establishment) Act; Customs and Excise Tariff, etc (Consolidated) Act; Value Added Tax; Federal Inland Revenue Service (Establishment) Act; Nigeria Export Processing Zone Act; Oil and Gas Export Free Zone Act; Fiscal Responsibility Act; Companies and Allied Matters Act 2020; and Public Procurement Act; in order to make further provisions in connection with Federal Government Financial Management; Public Revenue and other relevant matters.
Highlighting the strategic objectives of the bill , the Senate leader said, “It seeks adopt appropriate counter-cyclical fiscal policies to respond to the economic and revenue challenges precipitated by the decline in international oil prices, as well as the impact of the COVID-19 Pandemic on the N igerian economy;
“Reform extant Fiscal Policies to prioritise job creation, economic growth, socio-economic development, domestic revenue mobilization, as well as to foster closer coordination with Monetary and Trade Policies;
“Provide fiscal relief for taxpayers by reducing the applicable minimum tax rate for two (2) consecutive years of assessment, as well as reforming the commencement and cessation rules for small businesses;
“Propose measures to fund the Federal Government’s COVID-19 Pandemic response and introduce provisions to enhance the recovery of corporate donations towards responses to the COVID-19 Pandemic, as well as any similar crises in the future;
“Amend certain aspects of the Fiscal Responsibility Act, to align this Act with the 1999 Constitution (as amended), as well as to enhance fiscal efficiencies by controlling the cost-to-revenue ratios of key State and Government Owned Enterprises; and amend the Public Procurement Act, to implement key procurement reforms previously proposed by the National Assembly, in 2019, to extend the scope of the Act to the Federal Judiciary and Legislature, accelerate procurement processes, increase mobilization fee thresholds and provide for essential e-procurement reforms.”
Specifically, the Senate Leader said under Value Added Tax ( VAT), a new section 8 is being processed to cater for the registration of taxable persons upon commencement of business.
According to him, the penalty for failure to register has been increased from N10,000 to N50,000 in the first month and from N5, 000 to N25,000 in the subsequent months.
He added that a new section 15 of VAT introduces a threshold for VAT compliance . Thus companies with turnover of N25million or more , shall render their tax on or before the 21st of every month .
Virtually all the Senators who contributed to debate on the bill , said it should be expeditiously considered since it targeted revenues for the 2021 budget.
But Senator Yusuf Abubakar Yusuf ( APC Taraba Central), in his own contributions , said provisions of the bill should be critically looked into , to stop a tax regime system that has been benefiting the rich more than the poor in the country.
“It is the poor that is subsidizing the rich in Nigeria because the rich pay tax or taxes not commensurate to revenues earned,” he said.