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Thursday, May 26, 2022

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Nigeria proposes increases in tax, tariffs to raise revenue profile

Nigeria is proposing a modest increase in taxes and tariffs on certain businesses and individuals over the medium term, according to the country’s Minister of finance and budget, Zainab Ahmed.

While addressing stakeholders at a public hearing on the 2021 finance bill in Abuja, Ahmed said the government was also considering new taxes as the “economy was now on a recovery path.”

The minister said a couple of reforms and amendments had been recommended in the draft 2021 finance amendment bill, adding that more would 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.

“Our aspiration is to do a midterm review with a possibility of another Finance Bill in mid-year 2022 to bring in more amendments,” she said.

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Ahmed 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.

She, however, 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.

Ahmed said there might 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 is 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,” she said.

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