Tax Increase Likely To ‘Strangle Businesses’, Says Mailafia

 

A former Deputy Governor of the Central Bank of Nigeria (CBN), Obadiah Mailafia, says the Finance Bill (2019) recently signed into law by President Muhammadu Buhari is likely to strangle businesses.

Mailafia who was a guest on Channels Television’s Sunrise Daily on Tuesday said as the nation’s economy gradually recovers, the new Act has the potential to kill businesses that are trying to survive.

“At a time of very slow recovery, it is risky to actually increase taxes. You are likely going to strangle businesses that are just struggling to survive,” he stated.

READ ALSO: Buhari Signs Finance Bill Into Law

Rather than increase in taxes, the economist advised the President Muhammadu Buhari administration to “relax some of the taxes, provide incentives and widen the tax base by bringing people who are outside the tax base.”

A former Deputy Governor of the Central Bank of Nigeria (CBN), Obadiah Mailafia, speaks on the President’s assent to the nation’s Finance Bill (2019) into law.

Speaking further, he stated that if taxes are increased, it would dampen the country’s economic growth.

He however commended President Buhari for his assent, noting that the move is a welcome development that it is good for the country.

“It is very welcome in principle because normally when you pass a budget, there should be a package of fiscal measures that should accompany such a budget.

“That is the standard practice. In fact, it used to be the standard practice in Nigeria until during the fourth Republic we forgot about it. So I think it is welcome, it is very good,” he stated.

Buhari Signs Finance Bill Into Law

President Muhammadu Buhari signs the 2020 Appropriation Act into law at the State House in Abuja on December 17, 2019.

 

President Muhammadu Buhari on Monday signed the 2019 finance bill into law.

The law alongside the 2020 Budget is aimed at reforming Nigeria’s tax system to align with global best practices, support MSMEs through the Ease of Doing Business initiative.

It also hopes to raise government revenues, as well as incentivize investments in infrastructure and capital markets.

RELATED: Senate Passes Finance Bill Proposing VAT Increase, Others

Like Senate, Reps Pass Finance Bill Proposing VAT Increase, Others

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.

Like Senate, Reps Pass Finance Bill Proposing VAT Increase, Others

Speaker of the House of Representatives, Femi Gbajabiamila, and some lawmakers at the lower chamber of the National Assembly in Abuja on November 28, 2019. Photo: [email protected]

 

 

The House of Representatives has passed the Finance Bill, 2019 submitted by President Muhammadu Buhari.

Members present at Thursday’s plenary passed the bill one week after it scaled through the third reading and was passed on the floor of the Senate in Abuja.

The bill seeks to amend six tax provisions and make them more responsive to tax reform policies.

Apart from the worries expressed by a cross-section of Nigerians concerning the increase in Value Added Tax on specific goods and services from 5 per cent to 7.5 percent, the bill also amends the tax provision of the Customs and Excise Tariff Act to encourage local manufacturers.

It introduces tax incentives for investment in infrastructure, capital markets and supports small businesses.

READ ALSO: Senate Passes Finance Bill Proposing VAT Increase, Others

The Finance Bill will reform the current tax regime by amending seven acts namely: Petroleum Profit Tax Act, Custom and Excise Tax Act, Company Income Tax Act, Personal Income Tax Act, Value Added Tax Act, Stamp Duties Tax Act, and Capital Gains Act.

Meanwhile, the House has urged the Nigeria Police to ensure that all policemen on highway patrol were properly dressed in uniforms with their vehicles properly numbered.

The lawmakers were worried that policemen on highway patrol do not wear any means of identification such as name tags, boots, and even berets.

They noted that as a result of this, criminals take advantage to ambush unsuspecting Nigerians on the highways and rob them of their valuables.

The House, was, however, convinced that if policemen were properly kitted and their vehicles numbered, it would be easier for road users to clearly differentiate them from criminals on the nation’s highways.

Thereafter, the House Committee on Police Affairs was mandated to investigate why policemen on highway patrols were not properly kitted.

The lawmakers asked the committee to report back in four weeks.

Finance Bill: FIRS, NNPC, Customs, Others Must ‘Sit Up’ – Senate

A file photo of the Federal Inland Revenue Service (FIRS) office in Abuja. Photo: Twitter- @firsNigeria

 

 

The Senate has asked agencies of the Federal Government saddled with the responsibility of generating revenues to be more efficient in discharging their duties.

Such agencies include the Federal Inland Revenue Service, the Nigerian National Petroleum Corporation (NNPC), and the Nigeria Customs Services among others.

President of the Senate, Ahmed Lawan, stated this during plenary on Thursday shortly after lawmakers in the upper chamber of the National Assembly passed the Finance Bill.

“The revenue-generating agencies will have to sit up; the Senate will be mounting a lot of oversight on the revenue agencies,” he said.

READ ALSO: Senate Passes Finance Bill Proposing VAT Increase, Others

The bill seeks to amend six tax provisions and make them more responsive to tax reform policies and the Customs and Excise Tariff Act to encourage local manufacturers.

The legislations under it include Companies Income Tax, Value Added Tax, Customs and Excise Tariff, Capital Gains Tax Act, Petroleum Profit Tax, Personal Income Tax, and Stamp Duties Act.

The billed was passed after it was read for the third time on the floor of the Senate, following the presentation of the report of the Senate Committee on Finance by Senator Adeola Solomon.

Addressing his colleagues 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.

He said, “Let me thank all of us for passing the seven Acts in the Finance Bill to ensure that we streamline the tax system in Nigeria and ensure that we get revenue for the government to provide infrastructure for this country.

“What we have done is very significant because this is to ensure that we not only have sources of funding for the 2020 Budget but also for subsequent activities of the government.”

“We must ensure that any agency that is charged with generating revenue must discharge its function judiciously.

“What we have done is to create more revenue to provide infrastructure for the Nigerian people,” Senate President Lawan stated.

Senate Passes Finance Bill Proposing VAT Increase, Others

A file photo of lawmakers during plenary in the Senate Chamber of the National Assembly in Abuja.

 

 

The Senate has passed the Finance Bill.

Members of the upper chamber of the National Assembly passed the bill during Thursday’s plenary after it scaled through the third reading on the floor of the Senate.

The bill seeks to amend six tax provisions and make them more responsive to tax reform policies.

It also seeks to amend the Customs and Excise Tariff Act to encourage local manufacturers.

The legislations under the bill include Companies Income Tax, Value Added Tax, Customs and Excise Tariff, Capital Gains Tax Act, Petroleum Profit Tax, Personal Income Tax, and Stamp Duties Act.

READ ALSO: FIRS, NNPC, Customs, Others Must ‘Sit Up’ – Senate

The passage of the bill followed the presentation of the report of the Senate Committee on Finance by Senator Adeola Solomon.

Lawmakers present, thereafter, shared their various perspectives on the effects of the bill on the nation and its people.

 

Not About Party

In his contribution, Senator Barau Jibrin informed his colleagues that the committee has put into consideration the need for Nigeria to reposition its system in order to strengthen its revenue base.

Similarly, Senator Abdullahi Yahaya believes revenue generation is a major problem facing the country and economic issues should not be politicised.

He said, “The problem of our economy is the problem of revenue; the issue of economy is one that is beyond politics to me.

“Whether it is APC today or PDP tomorrow, we have to come out and look at this matter in a non-partisan way.”

In his remarks, Senator Ibikunle Amosun stressed that there was no way the country would realise its intentions without sufficient revenue.

He was also hopeful that all funds generated would not be looted but would be judiciously used for the growth of the nation.

The lawmaker aligned himself with Senator Yahaya’s position that the lawmakers must look beyond politics.

“This is not about party but about our country. I will support this bill and will urge my colleagues that we should do away with partisanship,” he stated.

Meanwhile, some lawmakers expressed concerns over some of the tax bills as the Senate Minority Leader, Senator Enyinnaya Abaribe, insisted that the Value Added Tax (VAT) should be left at 5 per cent instead of the proposed increase to 7.5 per cent.

His contribution was, however, not taken into consideration by the Senate President, Ahmed Lawan, who ruled that Senator Abaribe should have raised the alarm during the second reading and not when the committee submitted its report.

The Senate President explained that the bill does not putting taxes on Nigerians but the Federal Government was trying to create the revenue necessary for the provision of schools, healthcare, and an economy that works for everyone.

“With time, we should look at things to do in case some hard unintended consequences come up,” he said.

Senate President Lawan thanked his colleagues for the passage of the bill which he said would ensure that the nation’s tax system was streamlined.

Senate Proposes 14-Year Jail Term For Sexual Predators In Tertiary Institutions

File Photo: President of the Senate, Ahmad Lawan, speaks during plenary in the Senate Chamber in Abuja on September 27, 2019.

 

The Senate on Wednesday debated two critical bills – the Sexual Harassment Bill and President Muhammadu Buhari’s Finance Bill, 2019.

The bills, which scaled second reading on the floor of the Senate, were sponsored by the Deputy Senate President, Ovie Omo-Agege and Senate Leader, Abdullahi Yahaya, respectively.

The proposed legislation titled “A Bill for an Act to Prevent, Prohibit and Redress Sexual Harassment of Students in Tertiary Educational Institutions and for other matters connected therewith 2019” has 27 clauses.

According to a statement signed by the Special Assistant (Press) to President of the Senate, Ezrel Tabiowo, the bill proposes up to 14 years jail term, with a minimum of five years, without an option of fine for any educator who commits sexual offences in tertiary institutions.

It defines sexual offences as including: sexual intercourse with a student or demands for sex from a student or a prospective student or intimidating or creating a hostile or offensive environment for the student by soliciting for sex or making sexual advances.

Other forms of sexual harassment identified in the bill are grabbing, hugging, kissing, rubbing, stroking, touching, pinching the breasts or hair or lips or hips or buttocks or any other sensual part of the body of a student; or sending by hand or courier or electronic or any other means naked or sexually explicit pictures or videos or sex related objects to a student, and whistling or winking at a student or screaming, exclaiming, joking or making sexually complimentary or uncomplimentary remarks about a student’s physique or stalking a student.

Senator Omo-Agege, in his lead debate, said: “the most effective way to deal with the offence of sexual harassment in our tertiary institutions is to penalise the very impropriety of the act, with or without consent.”

According to him, sexual harassment must be defined in tertiary educational institutions as statutory rape with strict liability for offenders to be prosecuted easily.

On the extension of the bill to primary, secondary schools, worship centres and work place, Omo-Agege said doing so will not be necessary because the Criminal and Penal codes already adequately deals with these categories with sufficient clarity.

He, however, stressed that the bill prescribes expulsion for students who falsely accuse educators of sexual harassment.

He said, “An educator whose character is maligned is at liberty to sue for defamation under the law of defamation which is well-settled in our jurisprudence and needs no duplication in this bill.”

The Senate also on Wednesday considered President Muhammadu Buhari’s Finance Bill, 2019.

Leading debate on the bill, Senator Yahaya Abdullahi (APC, Kebbi North), said the bill essentially seeks to promote fiscal equity by mitigating instances of regressive taxation; reforming domestic laws to align with global best practices; and introducing tax incentives for investments in infrastructure and capital markets.

The bill also seeks to support small businesses in line with ongoing ease of doing business reform, and raising revenues for government by various fiscal measures, including a proposal to increase the rate of Value Added Tax from 5 percent to 7.5 per cent.

According to Abdullahi, the additional revenues to be made by the Federal Government when this bill becomes law will be used to fund health, education and infrastructure programmes.

“It is absolutely essential to intensify the revenue generation efforts of this administration and its commitment to ensuring that the inconvenience associated with any fiscal policy adjustments is moderated such that the poor and the vulnerable, who are most at risk, do not bear the brunt of these reforms,” Abdullahi said.

Other bills which scaled second reading on the floor are: A Bill for an Act to provide for the establishment of the Federal University of Education, Kontagora, sponsored by Senator Aliyu Sabi Abdullahi (APC, Niger North), and A Bill for an Act to establish the Federal College of Education, Illo, sponsored by Senator Yahaya Abdullahi (APC, Kebbi North).