The Federal Government is considering introducing new tariffs and levies to rake in more revenue for the implementation of the 2020 budget, Zainab Ahmed, minister of finance, budget and national planning said Monday in Abuja.
Ahmed spoke at a public hearing on the 2021 Finance Act, organised by the House of Representatives committee on finance, held at the National Assembly Complex.
President Muhammadu Buhari had on December 2, transmitted to the House of Representatives, the 2021 Finance Bill, seeking the legislature speedy passage of the legislation to support the implementation of the N16.39 proposed budget.
The bill proposed key reforms to specific taxation, customs, excise, fiscal and other reIevant laws, specifically providing for enhanced domestic revenue mobilisatlon efforts to increase tax and non-tax revenues and tax administration and legislative drafting reforms, particularly to support the ongoing automation reforms by the Federal Inland Revenue Service (FIRS).
In her presentation, Ahmed disclosed that the government’s retained revenue was N4.56 trillion (75% of budget) as of September 2021; federal share of oil revenues – N845 billion (56.3% pro-rated performance); N1.31 trillion (117.3% above budget) as federal share of non-oil revenues; N616 billion and N274.4 billion (121% and 153% of pro-rata targets) of Companies Income Tax (CIT) and Value Added Tax (VAT) and N418 billion customs collections for the period under review.
She said modest changes have been proposed but more fiscal reforms were still in view as the ministry could not take all the proposals collected from stakeholders.
Read also: Buhari assures smooth transition in 2023
According to Ahmed, there are ongoing legal cases in court against the Federal Government on the Value Added Tax (VAT) and Stamp Duties which was why the ministry stayed off those areas.
She, however, expressed hope that by mid-2022, the cases might have been dispensed with and the reforms in those areas could be proposed for parliament to consider.
“We prepared this draft bill along with five reform areas: the first domestic revenue mobilisation, the second is tax administration and legislative drafting, third is International taxation, fourth is financial sector reforms and tax equity and fifth is improving public financial management reform.
“The provision in the draft bill is proposing to amend the Capital Gains Tax Act, Company Income Tax, FIRS Establishment Act, Personal Income Tax, Stamp Duties Act and Tertiary Education Act, Value Added Tax, Insurance Police Trust Fund, and the Fiscal Responsibility Act.
“This is to amend the Police Trust Fund Act and the Nigerian Trust Fund Acts, the purpose is to empower the FIRS to collect the Nigerian Trust Fund levies on companies on behalf of the fund itself.
“Currently, because there is no such provision, the FIRS is unable to start collecting on behalf of the fund. Also, it is to streamline the tax and the levy collection from the Nigerian companies in line with the administration’s ease of doing business policy.
“So we do not have NASENI going out to collect that tax, the FIRS will collect on their behalf during their collection process and it will be passed through to them,” the Minister said.
Responding to a question by James Faleke, chairman of the House finance committee, on how the Federal Inland Revenue Service (FIRS) has been handling the finance bills, Muhamad Nami, the FIRS chairman said the total refund given to it from the federation account in the year is about N25 billion.
“The challenge we have at hand is that if the proposal made by us is not considered, then the FIRS is now going to face a situation where taxpayers will write to us to request for refund and I think, currently, the total refund given to us from the federation account in the year is about N25 billion.
“So far, if you have a taxpayer who has already paid 25 billion as minimum tax, I’m just giving an example and you have some other taxpayers that have either wrongly or deliberately paid VAT into another account or the tax belonging to Kaduna State for instance into FIRS, where do you get money to make refund to that person.?
Femi Gbajabiamila, the speaker of the House, who declared the event open, said the 2021 Finance Bill seeks to introduce strategic and broadminded, positive reforms that will engender best practices and guarantee interest of the investing public and businesses.
Represented by Ndudi Elumelu, the minority leader, Gbajabiamila said the bill seeks to statutorily check borrowing by the federal, state and local and governments, enhance transparency and accountability in the administration in various strata of tax and public revenue generation.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
