The Federal Executive Council (FEC) on Wednesday ratified the Finance Bill 2021/2022 fiscal year. The bill, which is currently before the National Assembly focuses on tax as well as reviewing and amending some 11 fiscal laws, the Minister of Finance, Budget and National Planning, Zainab Ahmed, announced.
Briefing State House correspondents at the end of the meeting, the minister explained that rather than proposing new taxes, or increasing tax rates, the Finance Bill for the 2021/2022 fiscal year focuses on plugging loopholes and improving tax administration.
Ahmed said: “This draft bill was prepared by the Fiscal Policy Committee and it focused on tax and reviewing some fiscal laws and also amending some and these laws, about 11 in number, that have been affected. The purpose for us is to be able to refine our fiscal laws to improve tax compliance and also to enhance revenue generation.
“So, the proposed legislation falls under five broad categories. The first one of course, is domestic revenue mobilisation and various measures are proposed in the bill to enhance revenue.
“There’s also provisions that have been made to prevent the abuse of Personal Income Tax released by individual taxpayers and allowances to evade taxation.
“This second broad category is Tax Administration Reforms and this include provisions to support the FIRS ongoing reforms to fully automate and deploy technology to enhance collections and encourage taxpayer compliance and there are several measures in that category. But the third one is International Taxation Reforms.
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“This provision empowers the FIRS to better assess non-resident companies to taxation by taxing profits derived from digital services rendered to Nigerian customers and it’s also designed to reduce the tax compliance burdens on non-resident taxpayers that are not required to register in Nigeria as companies.”
On the objective of the bill, Ahmed said the third broad objective or the Finance Bill is financial reform to enhance tax equity.
“Most of these provisions that have been made are to enhance ongoing capital market reforms relating to securities lending transactions, real estate investment trusts, as well as the minimum taxation reductions that have been pioneered by the two previous Finance Bills.
“The fifth principle is Critical Public Financial Management and Reform. This reform was designed to strengthen the FIRS tax administration and coordination role in relation to the collection of taxes, vis-a-vis the responsibilities of relevant law enforcement agencies such as the Nigerian Police or the EFCC.
“Also to ensure and reinforce the supremacy of the fiscal rules and regulations as provided for by the Finance Controls and Management Act, as well as the 1999 Constitution, as amended,” the minister said.
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