Nigerians will now start paying 7.5 percent as Value Added Tax (VAT) after its increase was captured in the newly approved 2019 finance law.
President Muhammadu Buhari on Monday in Abuja signed the 2020 Finance Bill into law, increasing it from an initial 5 percent.
A statement by the Special Adviser to the President on Media and Publicity, Femi Adesina explained that the Finance law has five strategic objectives, in terms of achieving incremental, but necessary, changes to our fiscal laws.
“These objectives are; Promoting fiscal equity by mitigating instances of regressive taxation; Reforming domestic tax laws to align with global best practices; Introducing tax incentives for investments in infrastructure and capital markets; Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and Raising Revenues for Government.
“The draft Finance Bill proposes an increase of the VAT rate from five percent to 7.5 percent, as such, the 2020 Appropriation Bill is based on this new VAT rate,” he added.
The Federal Government had in September 2019, announced plans to review the VAT through consultations at various levels in the country.
Minister of Finance Zainab Ahmed who disclosed this, stated that the consultation will be with the states, local governments, and the lawmakers as well as with the Nigerian public before the VAT increase will take effect.
Mrs. Ahmed stressed that the VAT increase will be more beneficial to state governments and Local Government Areas (LGAs) in the country.
The new VAT rate is expected to shore up Federal Government revenue and it is expected to be deployed to fund health and education sectors as well as infrastructure projects.
Some food items have been exempted from the new VAT including; Brown and white bread; Cereals including maize, rice, wheat, millet, barley, and sorghum; Fish of all kinds; Flour and starch meals; Fruits, nuts, pulses and vegetables of various kinds.
Others are; Roots such as yam, cocoyam, sweet and Irish potatoes; Meat and poultry products including eggs; Milk; Salt and herbs of various kinds; and Natural water and table water.
The Federal Government also plans to raise the threshold for VAT registration to N25 million in turnovers per annum, such that the revenue authorities can focus their compliance efforts on larger businesses thereby bringing relief for Micro, Small and Medium-sized businesses.
President Buhari after signing the bill into law, said: “This is the first time, since the return of democracy in 1999, that a Federal Budget is being accompanied by passage of a Finance Bill specially designed to support its implementation and to create a truly enabling environment for business and investment by the private sector.”
He thanked the leadership and members of the Ninth National Assembly for the “hard work and support that have gone into the passage of the landmark Deep Offshore and Inland Basin PSC Amendment Bill, and the Finance Bill; both vital to the successful implementation of the 2020 Budget.”
Both chambers of the National Assembly passed the finance bill in November while the 2020 budget in December 2019.
The finance law seeks to amend six tax provisions and make them more responsive to tax reform policies.
Meanwhile, there is an increase in Value Added Tax on specific goods and services from 5 percent to 7.5 percent; the law also affects changes in the tax provision of the Customs and Excise Tariff Act to encourage local manufacturers.
Other Acts captured include; Petroleum Profit Tax Act, Company Income Tax Act, Personal Income Tax Act, Stamp Duties Tax Act, and Capital Gains Act.
After passing the finance bill, President of the Senate, Ahmed Lawan, asked agencies of the Federal Government saddled with the responsibility of generating revenues including the Federal Inland Revenue Service, the Nigerian National Petroleum Corporation (NNPC), and the Nigeria Customs Services among others, to be more efficient in discharging their duties.
Addressing his colleagues during plenary after they shared their various perspectives on the effects of the bill on the nation and its people, the Senate President explained that the bill aims to help Nigeria generate more revenues.
Gombe State Governor, Inuwa Yahaya, has signed the 2020 budget passed by the Gombe State House of Assembly into law.
He assented to the bill during a brief ceremony on Friday at the Government House in Gombe, north-east Nigeria.
The N130.83 billion Appropriation Act tagged ‘Budget of Change’ has N71.04 billion for capital expenditure while N59.78 billion is for recurrent expenditure.
Governor Yahaya was confident that the budget would bring the desired change to meet the yearnings and aspirations of the people, in line with the government’s next level agenda.
He commended members of the State House of Assembly for the expeditious consideration and passage of the budget.
The governor also assured residents of logical implementation to ensure that the people enjoy the dividends of democracy through good governance.
“With the passage and signing into law of the 2020 budget, the onus now lies on us to live up to expectation and justify the confidence reposed in us by the people,” he was quoted as saying in a statement by his media aide, Ismaila Misilli.
Governor Yahaya added, “This time around, no excuse will be tolerated because the budget so passed and assented to belongs to us.”
He noted that it was the first time the state involved the public in the budget process through a town hall engagement with stakeholders, before presenting it to the State Executive Council and laying it before the House for legislative scrutiny and eventual passage.
The governor commended the state Ministry of Finance, as well as the office of the Special Adviser on Budget, Planning, and Development Partners Coordination for playing vital roles throughout the budget process.
Earlier, the Speaker of Gombe State House of Assembly, Abubakar Kurba, said the House was delighted and proud of the performance of the governor.
He gave the assurance that they would continue to cooperate with the present administration to bequeath a Gombe which the up-coming generation would be proud of.
Oyo State Governor, Seyi Makinde, has signed the state’s 2020 Appropriation Bill into Law.
He assented to the bill on Monday at a brief ceremony which held inside the State’s Executive Council Chambers of the Government House in Ibadan, the state capital.
The governor’s assent to the bill heralds the beginning of preparations for the 2020 fiscal year.
In his remarks, Governor Makinde was explained that the budget which was increased by over N4 billion by the state House of Assembly targeted a minimum of 70 per cent implementation.
He was confident that the budget would achieve landmark infrastructural development in the state.
The Governor commended members of the State House of Assembly for promptly scrutinising and passing the proposed budget in order to accelerate its implementation to start from the beginning of the next year.
He noted that the drafting of the budget was holistic in nature as everyone in all the nooks and crannies of the state was carried along.
The total amount passed by the state House of Assembly was N213.78 billion, an increase of N4.9 billion compared to the budget proposal submitted.
Governor Makinde revealed that the top four sectors with the highest budgetary allocations are infrastructure – 23.93 per cent, education 22.37 per cent, health – 5.18 per cent, and agriculture – is 4.1 per cent.
He hinted that all the civil servants would receive their 13th-month salary by December 28, 2019.
On his part, Speaker of the Assembly, Adebo Ogundoyin, explained that the increase of over N4 billion was targeted at the development of grassroots areas.
The Taraba State Governor, Darius Ishaku, has presented the 2020 Appropriation Bill to members of the State House of Assembly.
Tagged ‘Budget of Accelerated Growth and Development’, the bill places a high premium on human and social development and guided by some micro-economic variables.
Addressing members of the Assembly on Thursday in Jalingo, Governor Ishaku said the 2020 budget estimated at N213.632.706.810 has an increase of N67.558.349.928, representing 31.63 per cent more than the 2019 budget of N146.73 billion.
He added that the budget performance of 2019 stood at 50.65 per cent with N146,73 billion.
For the 2020 estimated bill in the state, the works, housing and transport sectors got the highest allocation of N77.3billion, with a ratio of 36.06 per cent while the solid minerals sector gulped the lowest allocation of N200 million at 0.09 per cent.
The recurrent expenditure estimate stands at N71.569 billion naira, representing 33.5 per cent while capital expenditure estimate stands at N142.62 billion with a percentage of 66.5.
Sectoral allocations, according to the budget, reveals that the agricultural sector gets N18 billion which is 4.01 per cent, while Commerce and Industry sector gulps N1 billion representing 0.45 per cent.
Others are Finance and poverty alleviation – N3 billion, information – N1 billion, education – N11 billion, health – N14 billion, social development – N1 billion, environment and forestry – N935 million.
Governor Ishaku said his administration has resolved to grow infrastructural development and take it to another height.
He also informed the lawmakers that his administration would place a high premium on human capital development for youths of the state, hence the high allocation to the educational and health sector.
In his remarks, the Speaker of the House, Joseph Kunini, assured the governor of the “willingness and readiness “of the lawmakers to give the budget an accelerated process with a view to passing it in a good time for its implementation.
He noted that the budget has taken into cognisance what the House members “intend to do for their constituencies.”
Briefing the press shortly after the budget presentation, the Speaker cleared the air on why the minimum wage was not captured in the budget for 2020 and why the agricultural sector was also given a better share in order to diversify the economy.
President Buhari commended the National Assembly for its “patriotic zeal” which he said has restored the nation’s budget cycle to a predictable January to December fiscal year.
According to him, it is the fourth time that the budget was passed before the end of the previous year and the earliest in the 20 years since the return to civilian rule.
The President revealed that he has directed that efforts be made to ensure the presentation of the 2021 Appropriation Bill to the National Assembly in September 2020.
“I am confident that all Federal Ministries, Departments, and Agencies will cooperate with the Ministry of Finance, Budget, and National Planning to keep to this timeline.
“I will work with the Ninth National Assembly to give effect to the constitutional, legislative and other actions that may be necessary to address the various challenges currently associated with our federal budgeting process, including the enactment of an Organic Budget Bill,” he promised.
On the Finance Bill, President Buhari noted that the proposal would be passed by the lawmakers in the coming days.
He believes it would be a landmark achievement worthy of recognition as it is the first time such a thing has been done in the last 20 years.
The President added that his administration would sustain the tradition by ensuring that subsequent budgets were also accompanied by a finance bill.
He said, “We look forward to receiving this bill, shortly, for Presidential Assent. Once passed into law, the Finance Bill will support the funding and implementation of the 2020 Budget.”
In his remarks, the President commended the patriotic zeal of the National Assembly for the quick passage of the budget.
He, however, informed the lawmakers that he looks forward to receiving the Finance Bill for assent in the shortest time.
President Buhari, therefore, called on the Ministries, Departments, and Agencies (MDAs) to ensure the effective implementation of the 2020 budget.
He expressed confidence in his administration’s ability to finance the 2020 budget.
In view of this, the President directed that the 2021 budget estimates be submitted to the National Assembly by September next year.
The signing of the 2020 budget was witnessed by the Vice President, Professor Yemi Osinbajo; the Secretary to the Government of the Federation, Mr Boss Mustapha; and the Minister of Finance, Budget, and National Planning, Mrs Zainab Ahmed.
Also present were the President of the Senate, Senator Ahmed Lawan; and the Speaker of the House of Representatives, Mr Femi Gbajabiamila, among other National Assembly leaders.
Read the President’s full speech at the event below:
It is my pleasant duty, today, on my 77th birthday, to sign the 2020 Appropriation Bill into law.
I thank the National Assembly, in particular, the Senate President, the Speaker of the House of Representatives, and indeed all the Distinguished and Honourable Leaders, and Members, for passing the 2020 Appropriation Bill, expeditiously.
You will recall that I laid the 2020 Appropriation Bill before the Joint Session of the National Assembly on 8th October 2019 and forwarded the 2019 Finance Bill shortly thereafter.
I am very pleased that the National Assembly worked uncommonly long hours in the interest of our people and the national economy to ensure detailed legislative review and passage of the Budget within two months.
This patriotic zeal adopted by the Ninth National Assembly has restored our budget cycle to a predictable January to December fiscal year.
Furthermore, in the 20 years since the return to civilian democracy, this will be just the fourth time that the Federal Budget was passed before the end of the previous year, and this is the earliest.
The passage of the Finance Bill, which I am told will be done in the coming days, will also be a landmark achievement worthy of recognition, being the first time, this has been done in the last twenty years.
We look forward to receiving this Bill, shortly, for Presidential Assent. Once passed into law, the Finance Bill will support the funding and implementation of the 2020 Budget.
We shall sustain this tradition by ensuring that subsequent budgets are also accompanied by a Finance Bill.
For these achievements, I must, therefore, congratulate and thank the Distinguished Senate President, the Right Honourable Speaker and indeed, all members of the Federal Legislature for their commitment and support.
I equally thank the Ninth National Assembly for supporting important legislations such as the Deep Offshore and Inland Basin Production Sharing Contract Amendment Act and the 2019 Finance Bill. These laws are vital to the successful implementation of the 2020 Budget.
I am aware of the regular high-level discussions that took place, between senior officials of the Executive and the Legislature during this period.
I commend this renewed partnership, the mutual understanding as well as collaboration between these two arms of government.
Now, we are well-positioned to effectively implement the budget and deliver our promises to Nigerians. Businesses will also benefit as they are now in a position to plan more effectively.
We have to sustain this harmonious working relationship. I expect that, going forward, this will be the norm.
I have directed that efforts be made to ensure the presentation of the 2021 Appropriation Bill to the National Assembly in September 2020.
I am confident that all Federal Ministries, Departments and Agencies will cooperate with the Ministry of Finance, Budget and National Planning to keep to this timeline.
I will work with the Ninth National Assembly to give effect to the constitutional, legislative and other actions that may be necessary to address the various challenges currently associated with our federal budgeting process, including the enactment of an Organic Budget Bill.
The 2020 Budget passed by the National Assembly provides for aggregate expenditures of N10.594 trillion, an increase of N263.95 billion over the Executive’s proposal that was submitted in October 2019.
We have examined the adjustments and may revert to the National Assembly with a request for a virement or other relevant amendments.
The Honourable Minister of Finance, Budget and National Planning will make a public presentation of the details of the approved budget.
With today’s global oil market outlook and our strategic approach to revenue growth, we are optimistic that we will be able to finance the 2020 Budget.
However, being a deficit budget, an appropriate 2020 – 2022 Borrowing Plan will be forwarded to the National Assembly, in due course.
Mr Senate President, Right Honourable Speaker, for this submission, I will once again count on your usual cooperation and support by ensuring quick consideration and approval of the Plan.
To optimise the desired impact, I have directed the Ministry of Finance, Budget and National Planning and all Federal MDAs to ensure effective implementation of the 2020 Budget.
I wish to acknowledge the efforts of the Minister of Finance, Budget and National Planning, the Budget Office of the Federation, and all stakeholders, who collaborated and worked painstakingly, to produce the 2020 Appropriation Bill, that I have just signed into law.
I thank you most sincerely for your kind attention.
May God continue to bless the Federal Republic of Nigeria.
During the session on December 5, the lawmakers had raised the total budget estimates from the proposed N10.33 trillion to N10.6 trillion.
President Buhari presented a budget estimate of N10.33 trillion to a joint session of the National Assembly on October 8, based on the Value Added Tax (VAT) of 7.5 per cent up by 2.5 per cent.
If signed into law, it means the administration of Muhammadu Buhari and the National Assembly would have succeeded in returning the country to the January – December budget cycle.
Meanwhile, the leadership of the National Assembly, including the Senate President, Ahmad Lawan, and Speaker of the House of Representatives, Femi Gbajabiamila, are reported to have been invited to witness the signing of the budget.
Chairman of the Committee, Senator Shuaibu Isah Lau (PDP, Taraba North), in his presentation, said “certain amendments were made on the bills to encapsulate the ingredients of the varied views collated from experts and professionals, aimed at adding value to the Procurement Act.”
The Senate, in a clause-by-clause consideration of the bill, adopted the recommendations of the committee with slight amendments made to Section 1 under the Establishment of National Council on Public Procurement.
The Senate also adopted the committee’s recommendation on the issuance of Certificate of No Objection which shall be issued by a Committee of Directors of the Bureau to the chaired by the Director-General of the Public Procurement Bureau.
“The public procurement process in Nigeria has been a big bottleneck for some time, probably since it was passed.
“I believe that with this amendment, the procurement process will be faster and better, as will be the budget implementation process.
“Surely, this bill will have to go to the House of Representatives for them to concur.
Similarly, the upper chamber considered the recommendation of the committee to review upwards the mobilization fee from 15 percent to 20 percent for local contractors as insufficient.
Accordingly, Section 35 of the Act was amended to provide for not more than thirty percent mobilization for local contractors.
The amendment for an upward review of thirty-five percent mobilization for local contractors was initially proposed by Senator Jibrin Barau (APC, Kano North) and seconded by Ibikunle Amosun (APC, Ogun Central).
The Senate, however, settled for a thirty-percent review moved by Senator Abba Moro (PDP, Benue South) and seconded by Senator Rose Oko (PDP, Cross River North).
Adamawa State Governor, Umaru Fintiri, has presented a budget proposal of N183.3 billion for the 2020 fiscal year tagged ‘Budget of Rebirth’.
The governor presented the proposal to members of the State House of Assembly on Wednesday at the legislative chamber of the House in Yola, the state capital.
He was accompanied by the newly sworn-in members of the State Executive Council and other top government officials.
In his presentation, Governor Fintiri explained that education, health, human capital, agriculture, water supply, rural infrastructure, and community development would be given top priority.
He informed the lawmakers that N85.935 billion representing 47 per cent of the total budget was earmarked for recurrent expenditure while the balance of N97.424 billion representing 53 per cent was for capital development programmes.
The governor promised to complete all abandoned projects and initiative new ones with a view to impacting on the socio-economic life of the citizens and foster economic development.
He also gave assurance that his administration would achieve 90 per cent performance at the end of the 2020 fiscal year.
President of the Senate, Ahmad Lawan said on Tuesday that the National Assembly is working towards the passage of the 2020 Appropriation bill on November 28, 2019.
To achieve this target date, Lawan directed the Senate Committee on Appropriations to submit its report on the 2020 budget proposals on November 26, 2019.
Lawan gave the directive on the floor of the Senate during plenary.
The Senate President stated that the committee’s compliance to lay its report on November 26 would facilitate the passage of the 2020 budget on November 28, before the National Assembly proceeds on Christmas break.
He said: “On the Budget 2020 we are working on, the ball is now in the court of Senate Committee on Appropriations, the last committee standing.
“All the committees have done their work so well within the defined parameters and we, therefore, expect the Appropriations Committee to produce the report and lay it here by the 26th of November, next two weeks.
“I believe that the same thing will be done in our sister chamber, the House of Representatives, so that we are able to pass the Appropriation Bill 2020 on November 28, by the Grace of God.”
Meanwhile, a total of twelve bills scaled first reading on the floor on Tuesday.
The bills are: National Religious Equity Commission (Est.) bill, 2019, sponsored by Senator Stella Oduah; Constituency Development Fund (Est.) bill, 2019, by Senator Ali Ndume; National Agency for Technology Incubation (Est.) bill, 2019, by Senator Ajayi Boroffice; National War College Act (Amendment) Bill, 2019, by Senator Aliyu Wamakko; Compulsory Free Universal Education Act (Amendment) Bill, 2019, by Senator Rose Oko, and Private Security and Forensic Investigation Bureau of Nigeria (Est.) bill, 2019, by Senator Barinanda Mpigi.
Others are: Police Act (Amendment) Bill, 2019, by Senator Betty Apiafi; Federal University of Agriculture and Technology Funtua (Est.) bill, 2019, by Senator Bello Mandiya; Federal College of Education (Technical) Kaima, Kwara State (Est.) bill, 2019, by Senator Sadiq Umar; Federal University of Gashua (Est.) bill, 2019, by Senator Yahaya Abdullahi; Federal Medical Centre Dekina, by Senator Jibrin Isah, and National Commission for the Prohibition of Hate Speeches (Est.) bill, 2019, by Senator Aliyu Sabi Abdullahi.
Ekiti State Governor, Dr Kayode Fayemi, has presented the 2020 Appropriation Bill of N124.7 billion to the State House of Assembly.
Dr Fayemi who is also Chairman of the Nigeria Governors’ Forum presented the bill to the lawmakers during a session on Friday at the legislative chamber of the Assembly complex in Ado, the state capital.
The bill, christened ‘Budget of Deliverables,’ has N53.5 billion representing 43 per cent as capital expenditure while the recurrent expenditure is N71.1 billion, representing 57 per cent of the total budget estimates.
Thirty-six per cent of the budget proposal which is the highest allocation is earmarked for governance while infrastructure and industrial development take the second-highest share of 32 per cent.
Similarly, the ‘knowledge economy’ which encompasses education gulps 20 per cent, becoming the third-highest allocation in the state’s 2020 fiscal year.
Governor Fayemi informed the lawmaker that he was delighted that development partners were helping the state government with rural road constructions and promotion of agriculture among other cheering projects aimed at developing the state.