Nigerians have been told to gear up increases in taxes and tariffs on certain businesses and individuals over the medium term.
Minister of finance, budget and national planning, Zainab Ahmed, who gave the heads up, however, said the increases would be modest and that the government is also considering new taxes as the “economy was now on a recovery path.”
She made this known while addressing stakeholders at a public hearing organised by the House of Representatives Committee on Finance on the 2021 Finance Bill in Abuja, on Monday.
According to her, a couple of reforms and amendments had been recommended in the draft 2021 finance amendment bill and more will be introduced in the middle of 2022.
Ahmed said more fiscal reforms were still in view as the ministry could not take all the proposals collected from stakeholders.
“While these issues may require most increases in taxes and tariffs on certain businesses, industries, and individuals over the medium term…,” Ahmed said in her closing remarks.
”Our aspiration is to do a midterm review with a possibility of another Finance Bill in mid-year 2022 to bring in more amendments.”
The minister explained that the ongoing legal cases in court against the federal government on VAT and stamp duties had prompted the finance ministry to steer clear of those areas even as she expressed hope that by mid-2022, the cases might have been dispensed with, and then reforms in those areas could be proposed for parliament to consider.
She further stated that there might be a need to revisit the antiquated stamp duties and capital gains tax for holistic reform by the parliament.
“We prepared this draft bill along 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 Mr President’s 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,” Ahmed added.
