The Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed yesterday asked Nigerians to brace for more taxes, levies and tariffs.
She however, gave a caveat – the new taxes and levies will not be introduced until there is improvement in the economy.
The minister, during a public hearing organised by the House of Representatives Committee on Finance on the 2021 Finance Bill at the Green Chamber of the National Assembly.
House of Representatives Speaker Femi Gbajabiamila stressed the need to repositioning the nation’s financial system to plug wastes, close openings for corruption, create opportunities for employment and stimulate stability and growth in the nation’s productive sectors.
The minister disclosed that there was the need for the country to focus more on non-oil sector revenue to finance critical infrastructure.
She said the non-oil sector has performed better than the oil sector, recording about 171.3 per cent above the projected figure as at September 30, 2021, averaging N1.31 trillion.
Mrs. Ahmed said: “As of Sep. 2021, the Federal Government’s retained revenue was N4.56tr, achieving 75% of Budget; Federal share of Oil Revenues was N845 billion (representing 56.3% pro-rated performance). Federal share of Non-Oil revenues was N1.31 trillion (117.3% above budget).
“Companies Income Tax (CIT) & Value Added Tax (VAT) collections were N616 billion and N274.4 billion representing 121% and 153%, respectively, of the pro-rata targets. Also, Customs collections were N418.97 billion.
“Clearly, our ongoing fiscal reforms of the last six years are yielding tangible results. However, the ministry is closely studying the following issues, developments & policies.”
The minister said some reforms and amendments had been recommended in the draft 2021 finance amendment bill, adding that more will be introduced in the middle of 2022.
She 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.”
Ahmed explained that the ongoing cases in court against the Federal Government on VAT and stamp duties had prompted the finance ministry to steer clear of those areas.
She, however, expressed hope that by mid-2022, the cases might have been dispensed with, and reforms in those areas could be proposed for parliament to consider.
Mrs. Ahmed said there may be 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 finance minister said.
“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.”
