The Fiscal Policy Reforms Committee announced that it will correct any errors that come up from the implementation of the Finance Act 2020 if fiscal enactment is needed to adjust the 2021 Appropriation Act.
This was disclosed by Mr. Bode Oyetunde, Senior Special Assistant to the President on Finance and Fiscal Matters and Secretary of the committee, at the Finance Act 2020 virtual stakeholder consultation meeting on Tuesday.
The Federal Government, in the Finance Act 2020, introduced a 50% reduction in the minimum tax rate.
Oyetunde said that the FG had already reduced the minimum tax rate from 0.50% to 0.25% applicable for the Years of Assessment (YOA) from January to December 2020 to cushion the effects of the pandemic on businesses.
“There may be some fiscal enactment before the middle of the year to adjust the 2021 Appropriation Act and if so, the Fiscal Policy Reforms Committee will take the opportunity to correct any perceived errors in the Finance Act 2020.
“We use criminal law to back tax provisions and the constitution does not allow us to penalise people for crimes committed that are not crimes at the time they were performed,” he said.
Mr. Sanya Gbonjubola, Director, Tax Policy and Advisory Department, FIRS, added that there would be no tax refunds citing that the proponent of the clause was to give relief for two years to taxpayers “in view of what everyone is facing.”
“In couching the law, there was some error. What has happened is that the language of the law has effectively reduced the two years to one year.
“It happens that tax laws are never made in retrospect and any provision you make in retrospect, whether against or for the taxpayer, is ab initio.
“So what has happened is the intended two years has shut down to one year,” he added.
What you should know
- Nairametrics reported in November 2020 that the Federal Government approved the 2020 Finance Bill to support the 2021 budget as it said that there were no plans to increase the tax burden on Nigerians.
- The Finance Act 2020 also provides that the federal government can borrow from the unclaimed dividends and dormant account balances under the Unclaimed Funds Trust Fund.