Nigeria Finance Bill: Experts pick holes in 100% raise in Minimum Tax
Nigeria Finance Bill: Experts pick holes in 100% raise in Minimum Tax
Stakeholders who participated at the public hearing and memoranda taking at the Nigeria’s National Assembly on Tuesday pointed out areas of disagreement in the proposed 2019 financial bill sponsored by the Executive arm of government.
The bill has already passed second reading at both Senate and House of Representatives but at the stakeholders have urged the parliament to take a second look at critical areas such as Minimum Tax rate, Stamp Duties and Company Income Tax rates provisions of the bill.
For instance, the current minimum tax rate as provided for in the Companies Income Tax Act is 0.25 percent but the new bill proposes a 100 increment in the rate to 0.50.
Tax experts drawn from some organisations working in Nigeria urged the National Assembly to return the minimum tax rate to the original 0.25 per cent or even lower considering that the bill is also proposing increment of Value Added Tax (VAT) rate from 5 per cent to 7.5 percent, representing a 50 percent increase.
Representatives of the KPMG, Manufacturers Association of Nigeria (MAN), Anderson Tax, among others urged said that the 100 per cent increase in the bill would affect companies adversely because “after simulation of 0.50 per cent as minimum tax, companies’ capitals would be affected adversely”.
Minister of Finance and Budget Planning, Zainab Ahmed representing the executive arm said the bill when passed into law would promote fiscal equity, provide balance in international taxation, raise tax revenue and contribute to the country’s ease of doing business.
The Chairman of the Senate Committee on Finance, Solomon Adeola promised that the submissions of the stakeholders would be looked into as the parliament goes into technical work on the bill.
It is expected that the bill will be passed very soon to raise the country’s VAT rate to 7.5 per cent. What is not certain is if the parliament would listen to the submissions of the stakeholders to retain the minimum tax at 0.25 percent.