The Senate yesterday passed the Finance Bill 2021, transmitted to the National Assembly by President Muhammadu Buhari, on December 7, 2021.
The passage by the Upper Chamber of the National Assembly, followed the consideration of a report by the Senate Joint Committee on Finance; Customs, Excise and Tariff; Trade and Investment.
One of the major highlights of the Bill is the aspect empowering the Federal Inland Revenues Service (FIRS) to assess non-resident firms like Twitter, Facebook, Google, and Netflix, among others.
They are to be taxed on fair and reasonable turnover earned from digital services to Nigerian customers.
The Finance Bill further mandates FIRS to appoint persons for the purpose of collection and remittance of non-resident taxes.
In his presentation, Chairman of the Joint Committee, Senator Solomon Adeola, said the Bill seeks to support the implementation of the 2022 Federal Budget of Economic Growth and Sustainability by proposing key specific taxation, such as Customs Duties, fiscal charges and other relevant laws.
Adeola, representing Lagos West, said a total of 12 Acts were amended under the Finance Bill which contains 39 clauses.
He said the Bill seeks to promote fiscal equity, align domestic tax laws with global best practices, introduce tax incentives for infrastructure and the capital market and support small businesses with a view to increasing government’s revenue.
“The Finance Act 2020 was predicated essentially on having no new taxes and no new incentives due to the COVID -19 impact on the economy, as such, it was structured across four broad thematic areas; Enacting counter cyclical measures and crisis intervention initiatives; Tax, fiscal responsibility and public procurement reforms; Reforming fiscal incentives policies for job creation; ensuring closer coordination of monetary, trade and fiscal policies and Enhancing tax administration,” Adeola said.
The committee based on its observations, recommended five per cent Capital Gains Tax to be imposed on shares’ disposal transactions where gains exceed N250 million in 12 months.
It recommended that Gaming and Lottery companies be taxable, as it applies to oil and gas companies.
The Bill underscored the need for midstream and downstream oil and gas companies to be liable to corporate tax, without the benefit of tax exemptions for firms exporting goods to earn foreign exchange.
The Bill equally sought more powers for the Federal Inland Revenue Service (FIRS) to collect the Nigeria Police Trust Fund (NPTF) levies on Nigerian companies and to streamline tax, levy collection from Nigerian companies in line with the administration’s ease of doing business reforms.
The committee stressed the need for the Federal Government to ensure that FIRS deploys both proprietary and third-party tech applications to collect information from taxpayers, enhance confidentiality and non-disclosure and to enable them investigate tax evasion and other crimes and sanction tax defaulters.
The Bill further empowers FIRS to assess and tax non-resident firms on fair and reasonable turnover basis on revenue earned from digital services to Nigerian customers, with a further mandate to appoint persons for the purpose of collection and remittance of non- resident taxes.
The committee demanded necessary reforms on securities lending transactions, minimum tax for insurance companies and companies in general, taxation of unit trust income, real estate investment trust, and insurance companies capitalization by NAICOM in line with tax equity.
It urged the government to mandate FIRS as principal tax revenue collection agency, to collaborate with law enforcement agencies and MDAs in streamlining tax collections by enhancing public financial Management reforms.
According to the joint committee, doing so would reduce revenue leakages and better track actual expenditure to revenue performance in line with the provision of the 1999 Constitution of the Federal Republic of Nigeria (as Amended), Fiscal Rules and other Extant Money Acts.
It also called for the diversification of Nigeria’s revenue from oil to other sectors to fund critical expenditures.
The committee demanded an increase of 0.5 per cent in education tax, pushed for close monitoring of unfolding development and policies on VAT, tax incentives, projected increase tariff on tobacco, alcohol and carbonated drinks to fund vital expenditure on health, education and security, with the possibility of introduction of new taxes, tariffs and levies as the economy recovers.
Do you have any information you wish to share with us? Do you want us to cover your event or programme? For Adverts or report call/WhatsApp us on +2348072633727
