FEC approves Finance Bill, says no tax increase
The Federal Executive Council on Wednesday approved the 2020 Finance Bill for subsequent transmission to the National Assembly.
The decision was taken at a meeting of the council presided over by the President, Major General Muhammadu Buhari (retd.).
The Minister of Finance, Budget and National Planning, Zainab Ahmed, briefed State House correspondents at the end of the meeting.
She said the 2020 Finance Bill was meant to support the 2021 fiscal year budget.
The minister gave an assurance that the bill would not lead to an increase in taxes because the situation in the country did not warrant increase in taxes.
She however said through the bill, the Federal Government was seeking ‘to make incremental changes to tax laws relating to Customs and Excise as well as other fiscal laws to support the implementation of annual budgets’.
Ahmed explained, “In the last Finance Bill 2019, we reduced taxes from 30 per cent to 20 per cent for enterprises that have turnover of between N25m to N100m.
“We also moved taxes from 30 per cent to zero per cent for enterprises that have turnover of N25m and bellow, which means they pay no taxes.
“What we are doing in the Finance Bill 2020 is to further renew the education tax of two per cent for that lower category of enterprises that have turnover of N25m and below.
“Another example is the reduction in the duties for vehicles that will be related to the mass transit. Again, no increase in taxes and no increase in VAT.”
Giving further insights into the bill, Ahmed said the government was working on implementing current fiscal reforms in line with the multi-year Medium Term Framework.
She said the bill was developed as a result of a large multi-stakeholder effort under Fiscal Policy Reform Committee that has several Ministries, Departments and Agencies as members.
“We also have proposed measures to create a legal instrument that supports a crisis intervention fund such as, the crisis intervention that we have had to put in place for COVID-19.
“So, we hope that we don’t have other crisis but we need to create such a fund so that it is available and it is legislated.”
The minister added that the government was amending the Fiscal Responsibility Act to enhance fiscal efficiencies and also to control the cost revenue ratios of government owned enterprises.