By Audrey Lotechukwu
MON 08 FEB, 2021-theGBJournal- Dr. Zainab Shamsuna Ahmed, the Minister of Finance, Budget and National Planning Monday explained at the Public Consultation for the Finance Act, 2020, why the Federal Government is unable to provide all the tax incentives to various interest groups as provided for in the Finance Act 2020, pinning it on the government’s current challenges with increasing domestic revenue mobilisation in a recovering economy.
‘’The Public Stakeholder Consultations of last week, and today, demonstrate our commitment to continuously consult and engage on the Finance Act that was accented to by President Muhammadu Buhari on 31st December 2020,’’ she said, while reminding the stakeholders as well that that the ‘’extensive public consultations were also held in November last year on the Finance Bill, 2020.”
She said the response of the government fiscal stance in the Finance Act 2020 is to moderate fiscal incentives, defer tax increases and new taxes until till the economy recovers, and to foster congruence across the government’s fiscal, monetary, trade and investment policies.
The Finance Act, 2020 provides fiscal relief for minimum wage earners, (who are exempt from personal income tax), as well as commuters and other consumers of road transportation goods and services. The Act also extends the Corporate Income Tax exemption in the Finance Act, 2019 for micro and small enterprises with an annual turnover of N25 million or less to include exemption from paying tertiary education tax.
The Minister noted that the Act consolidates on the fiscal reforms introduced in the Finance Act 2019. She said Act introduced 80 changes to about 14 different tax laws including the Company Income Tax Act, the Capital Gains Tax Act, Stamp Duties Act, Oil and Gas Export Free Zone Act, Customs and Exercise Tariff, etc (consolidated) Act, Value Added Tax Act, among others.
She informed the stakeholders that she has charged the Fiscal Policy Reforms Committee to take note of important issues raised during last week’s sessions and collate any concerns that taxpayers, investors, businesses, individuals and other key stakeholders may have regarding the Finance Act 2020.
‘’Furthermore, the window is open for ideas and concepts for inclusion into next year’s Finance Bill,’’ she said.
She also noted that the tradition of enacting annual Finance Bills does not preclude the need for more fundamental legislative reforms to key taxing status.
‘’Consequently, if any reforms proposed by key stakeholders have not been reflected in the Finance Act, 2020, there will be other opportunities to include deserving reforms in subsequent Finance Acts, or indeed, the wholesale amendment of other fiscal and economic laws.’’
The Minister recalled that President Muhammadu Buhari indicated in his 2021 Executive Budget presentation speech, that the Finance Act 2020 will support the realization of the 2021 revenue projections, adopt appropriate counter-cyclical fiscal policies and enhance the efficiency of fiscal incentives.
‘’As such, our focus is on incremental fiscal reforms that support 2020 Budget of Economic Recovery and Resilience,’’ she said. ‘’In response to ongoing health and economic challenges caused by the COVID-19 pandemic, we have adopted appropriate counter-cyclical fiscal policies to accelerate economic recovery from recent recession, as well as to stimulate economic growth in key sectors of the economy.’’