- Fears over possible increment in tax has been dismissed
- The federal government says it has no such plans
- The minister of finance, Mrs Zainab Ahmed, made clarifications concerning the controversial subject recently
The minister of finance, Mrs Zainab Ahmed, has assured Nigerians that the incremental changes to Nigeria’s tax laws do not mean that there will be an increase in taxes.
She gave the assurance on Wednesday, November 18 while addressing journalists attached to the presidential villa after the Federal Executive Council approved the Finance Bill 2020.
The minister explained that the bill will ensure improvements in tax laws while reducing some taxes for small and medium enterprises.
She told journalists that the 2019 Finance Bill actually reduced taxes from 30% to 20% for businesses with a turnover of between N25 million and N100 million.
“When we say incremental changes, it's making improvements in the tax law. It doesn’t mean increasing taxes. So, what we are doing in the Finance Bill for 2020, has no increases. There will be no VAT increase, VAT remains at 7.2%.
“So, when we say incremental, we mean gradually making changes so, the changes could be up or down. But for now, with the economic slowdown, our assessment is that this is the time to cut down on taxes, to not increase taxes at all, and also to not increase levies.”
Some Nigerians on social media have been offering their thoughts on the tax regime in the country.
Peter Kalusky wrote on Twitter:
“The federal government have to rely on a very rigorous taxation system both income tax, sales/VAT and individual/environmental degradation tax to fund majority of its projects, Nigeria must start these taxation processes now, That way it sinks in very well with future generations.
“Individual/environmental degradation taxes must not be based on formal income. The individual/degradation tax will target those Nigerians that earn income through the informal/unregistered sector. Individual/environmental degradation tax can be checked through BVN. It’s overdue.”
Dr Ayodele Oni wrote:
“The government should also do all within its power (and not pay lip-service) to reduce the cost of doing business. There are so many institutions that employers have to deal with & which impacts are not felt. Every month as an employer, you deal with the ITF, NSITF, FIRS.
“You deal with the local govt asking for tv, radio licences & all else, you also deal with pensions, BPP. All sorts of agencies. For example, I don't understand why lawyers have to make payments related to ITF, when it is an industrial training fund.”
Meanwhile, the federal government is in the process of acquiring a $750million loan, from the World Bank to help boost the Nigerian economy.
The loan according to the minister of finance, will stimulate the local economy and support vulnerable household consumption.
She disclosed this recently at an event of the Nigeria COVID-19 Action Recovery and Economic Stimulus (N-CARES) programme in Abuja.
Recall that the minister recently revealed that the total public debts of Nigeria would hit N38trillion by December 2021.
She disclosed this on Tuesday, November 3 in her presentation to the Senate committee on local and foreign debts.
According to her, the total public debt stock comprising the external and home debts of the federal and state governments and the Federal Capital Territory stood at N31.01trn (USD85.90 billion) as of June 30, 2020.
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