The Federal Government has said that the Finance Bill 2020 would not introduce new taxes or grant new tax waivers due to challenges posed by COVID-19.
The Executive Secretary, Federal Inland Revenue Service (FIRS), Mr Muhammad Nami, said this at a virtual meeting on the Finance Bill 2020 Public Consultation in Abuja on Friday.
The meeting was chaired by Mrs Zainab Ahmed, Minister of Finance, Budget and National Planning.
According to Nami, the policy objective of the bill has no intension to introduce new taxes or grant waivers in view of the peculiarities of what is facing the economy.
“The economy is not doing very great because of the impact of COVID-19 and all other challenges so ordinarily government should be spending more money.
“However, government is no able to raise the taxes; in the same way we still balance the budget to reduce the deficit as much as possible. Therefore, there will be no new waivers.”
Speaking on the African Continental Free Trade Area (AfCFTA) agreement, Nami said the impact would not be significant, in terms of revenue to government but increase the volume of trade with other countries.
“However, in anticipation of the AFCFTA, it is expected that the volume of trade will surge.
“And, as such, even though it will not significantly affect revenue being collected currently by government, it will have a way of making the economy increase significantly.”
Speaking, Ahmed said the public consultation was an opportunity to engage the public and get contributions to the draft of the Finance Bill 2020 aimed to support the 2021 Budget and also businesses.
The minister recalled that during the preparation of the Finance Bill 2019, provision for tax relief was made to small businesses.
“The essence was to ensure that local industries grow because once the African Continental Free Trade Area (AfCFTA) takes effect our borders will be opened and we will have goods from other countries competing with goods in Nigeria.”
She said that one of the basis for reducing taxes was to help the small businesses grow and to protect local industries.
“This is being reinforced in the 2021 proposal by removing completely for the small businesses the obligation to pay education tax.”
She said that the draft Bill would go to the Federal Executive Council (FEC) for approval, after which the President would submit it to the National Assembly for consideration.
Ahmed noted that the present administration had created a new tradition of accompanying every Appropriation Bill with a Finance Bill.
Also, Mr Adeyemi Dipeolu, Chairman, Fiscal Policy Reforms Committee, said a national impact assessment committee, set up by the president, had looked at the potential impact of joining the AfCFTA.
Dipeolu said the assessment was done “before Nigeria even signed the treaty”.
“The impact assessment has already been taken into account and there is an impact preparedness committee also chaired by the Minister of Industry, Trade and Investment.”
Mr Bode Oyetunde, Secretary of the committee, also highlighted five broad thematic areas for the Finance Bill 2020 including enacting counter-cyclical measures and crisis intervention initiatives.
Other areas are fiscal relief for mass transit, Ease of Doing Business Reforms, Procurement Reforms, and tax and fiscal responsibility.
Oyetunde said the overall idea of the AfCFTA was to look at trade laws and see how to make implemental changes that would make Nigeria “more competitive in the pan African point of view”.
“This is to ensure that businesses do feel they can site their enterprises locally and export, not just to West Africa, but the entire continent and also trying to ensure that we have fair trade with instances of trans-shipment and other sharp practices in continental and global trade.
“We also deal with the emerging post COVID realities where business will have to change and we have to do business better and differently.”
He, however, proposed that many of the issues poised to promote the Nigerian economy “have to be dealt with more holistically”.
The ministry also noted that feedback and proposals on the draft of Finance Bill 2020 was welcome until the close of business on Nov. 16.