Finance Act 2019 to make Nigeria business environment attractive to investors
As the conversation on the recently signed Finance Act 2019 continues to elicit reactions from industry stakeholders, especially tax administrators and practitioners on the likely impact of the Act on businesses and individuals, some stakeholders have stated that the 2019 Finance Act is capable of making Nigeria business environment friendlier to investors.
This was the outcome of the Ascension Consulting Services breakfast meeting on the ‘Practical Implications of the Finance Act 2019’ held in collaboration with Explorers Legal Practitioners and TESB Management Consultants.
Emeka Ofor, director, strategic communication, Nigeria Investment Promotion Commission, said the Finance Act 2019 was targeted at making Nigeria’s business environment more attractive to investors.
According to Ofor, the Finance Act will encourage investors to do business in Nigeria because it supports small and medium enterprises, which to him are the bedrock of the economy since the bulk of Nigeria’s enterprises operate in this segment of the economy.
Azeez Olatoye, senior partner, Ascension Consulting Services, said the breakfast meeting was to review the Finance Act 2019 with the hope of bringing the review to all its clients and Nigerians. “We also want to look at the incentives that are in the act as well as some of the impact of the act on businesses and lifestyles of Nigerians generally,” Olatoye said.
According to Olatoye, there is a need for more stakeholders’ engagement on the effective tax rate in the new Finance Act, which has not enjoyed elaborate discuss among stakeholders before now. However, speaking on areas of the Act that might require further amendment in 2020, Olatoye pointed at terms of payment, which according to him reflected in two separate sections of the Act.
“…for instance, the terms of payment; we still have it there in one of the sections saying mode of payment would be on the transaction, while another section is saying that the mode of payment is going to be on payment itself,” Olatoye said, stating that some of the areas would be fine-tuned in the 2020 Finance Act while other ambiguities in the 2019 Finance Act would also need further amendments.
Muhammad Nami, executive chairman, Federal Inland Revenue Service (FIRS), said the Finance Act 2019 set out to address issues in Nigeria’s tax laws that needed several amendments in order to be at par with peers and global best practice.
Represented by Femi Oluwaniyi, transition lead, Tax Operation Group for FIRS, Nami opined that the FIRS and other states revenue authorities must be on top of their game in order to make necessary changes to their procedure and processes to ensure that the intention behind the 2019 Finance Act was achieved from the taxpayers. “It’s all about going towards perfection; perfecting the various acts. Those things will come up and they will be addressed in the usual manner too.”
On the issue of compliance, Nami said, “We are deploying technology to a large extent to confirm the rightful position that people should be,” he said stating that the service is relying heavily on information sharing to improve the level of compliance.”
Abiola Sanni, Professor of Finance and Financial Consultant at the University of Lagos said there is a need to emphasise to all stakeholders, especially the president on the need to speedily sign the finance act into law every year. He opined that the interventions in the act are not sufficient enough because the finance act should be built on the national act policy which envisages a far reaching reform.
According to him, stakeholders need to engage more with the national assembly. There are no fundamental shifts in the new act, however, it does not potent a real challenge for professionals. He opined that there is likely to be push-back in terms of amendments.
Titi Fowokan said investors are interested in the incentive and the tax regime; hence there should be clarity on the new act.