The Minister of Finance, Budget and National Planning, Zainab Ahmed, has hinted that the federal government might introduce new tariffs and levies in 2022 as the economy moves on the path of recovery.
This disclosure was made by Ahmed while addressing stakeholders at a public hearing on the 2021 Finance Bill organised by the House of Representatives Committee on Finance on Monday in Abuja.
According to NAN, Ahmed pointed out that a number of reforms and amendments had been recommended in the draft 2021 Finance amendment bill saying that more will be introduced in the middle of 2022.
What the Minister of Finance is saying
Ahmed said that modest changes had been proposed but that more fiscal reforms were still in view as the ministry could not take all the proposals collected from stakeholders.
She said, “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 Finance ministry stayed away from introducing reforms on VAT and Stamp duties due to ongoing legal cases in court against the federal government in 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 that there might be need to revisit the antiquated Stamp Duties and Capital Gains Tax for holistic reform by the parliament.
She said, “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 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 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.’’
Ahmed pointed out that the Finance Bill was a product of the commitment made by President Muhmmadu Buhari during the presentation of the 2022 budget to the joint session of the National Assembly on October 8, 2021.
He said that the ministry had worked with relevant stakeholders and the Fiscal Policy Reform Committee to draft the 2021 Finance bill.
What you should know
Recall that in a letter dated December 7, 2021, to the National Assembly, President Muhammadu Buhari sought the consideration and passage of the Finance Bill 2022.
The President explained that the Finance Bill, 2021, seeks to support the implementation of the 2022 budget by proposing key reforms to specific taxation, customs, excise, fiscal and other relevant laws.
He added that the bill provides for enhanced Domestic Revenue Mobilization efforts to increase tax and non-tax revenues; and ensure Tax Administration and Legislative Drafting Reforms, particularly to support the ongoing automation reforms by the Federal Inland Revenue Service.
The bill also seeks to statutorily check borrowing by local, state and Federal Governments, enhance transparency and accountability in the administration in various strata of tax and public revenue generation.