A new Finance Bill approved by the Federal Executive Council on Wednesday seeks to enhance tax administration, create new jobs as well as generate revenue for public expenditure.
The draft 2022 Finance Bill also targets tax equity reforms, climate change and green growth provisions.
Minister of Finance, Budget and National Planning, Zainab Ahmed said the draft bill was approved at the meeting of the Federal Executive Council presided over by Vice President Yemi Osinbajo.
Vice President Yemi Osinbajo SAN presides over the Federal Executive Council at the Statehouse, Abuja. 14th Dec, 2022. Photos by Tolani Alli pic.twitter.com/NfCQyXlJnp
— Villa Updates (@VillaUpdatesng) December 14, 2022
Mrs. Ahmed said President Muhammadu Buhari had, during the presentation of the 2023 Appropriation Bill to the joint session of the National Assembly in October this year, said a new Finance Bill would be sent to the parliament to support the implementation of the 2023 Budget.
According to her, following consultations with various stakeholders, the ministry drafted the new bill to meet the president’s commitment.
“The bill that we presented to Council today has five focus areas, including tax equity reforms, climate change and green growth provisions, job creation and economic growth reforms, reforming tax incentives as well as generating revenue and enhancing tax administration.
“The purpose of the tax equity reform is to combat tax evasion and aggressive tax planning practices that some companies operating in Nigeria are involved in. But also enabling the utilization ICT tools and using international best practice to assess tax payer’s tax on a fair and reasonable basis.”
Green growth
The finance minister said that the focus of the climate change and green growth section of the bill is to complement non fiscal reforms that are designed to reduce greenhouse emissions.
She said it would facilitate domestic and international investments in climate adaptation, mitigation as well as to enhance green growth and to create jobs.
Mrs. Ahmed said the third focus area of the bill is job creation and economic growth, which is designed to complement the ease of doing business and other reforms to support capital formation by the private sector as well as to foster enabling business environment for MSMEs for youths as well as women owned businesses.
“It will also help to enhance the performance of businesses that are in FINTECH, the ICT, entertainment, fashion as well as arts space,” she stated.
Speaking further, Mrs. Ahmed said that “the fourth tax incentive is to phase out antiquated pioneer and other tax incentives for mature industries and move in a revised set of incentives to real infant industries.
“Through economic governance reforms we have also made proposals to reduce tax expenditure, which is equivalent to foregone revenue to support fiscal space.
“It is also based on statistics to gradually transition away from expensive and redundant tax incentives to incentives that are rewarding performance.
“The fifth focus area is revenue generation and tax administration is to complement the ease of doing business and other reforms that enhance tax administration as well as to introduce targeted fiscal and non-fiscal reforms to amend, address and cure defects in existing tax and non-tax laws and regulations.”
Amends fiscal laws
Mrs. Ahmed said that the Finance Bill 2022, if passed into law, would amend a number of fiscal laws in Nigeria.
These fiscal laws, she said, include the Capital Gains Law, the Company Income Tax Act, the Customs Excise Tariff Act, Federal Inland Revenue Service, FIRS, Act, the Personal Income Tax, Stamp Duties Act, Tertiary Education Tax, Value Added Tax, VAT, Act, the Insurance Act, and the Nigerian Police Trust fund Act.
Other laws that would be amended are the Nigerian Agency for Science and Engineering Infrastructure, NASENI, Act, Finance Control Act and the Fiscal Responsibility Act.
“With this approval by Council the president would be conveying to the National Assembly a request for the consideration of this bill,” Mrs. Ahmed said.
Whistle-blowers Bill
The Finance Minister said that the Council also approved the Whistle-blowers Bill for 2022 with a provision to ensure its alignment with the Evidence Act.
“The purpose of operationalizing and putting in place a bill is to strengthen the fight against corruption; to also enable protection for whistle-blowers that provide information for use by government,” she stated.
She explained that since 2016 the Federal Executive Council had approved the setting up of the Presidential Initiative on Continuous Audti, PICA, which has been working in partnership with Economic and Financial Crimes Commission, EFCC, the Directorate of State Services, DSS, ICPC, the Nigeria Financial Intelligence Unit, NFIU as well as the Office of the Attorney-General of the Federation.
“We noticed that the Whistle-blowers Policy response has lost momentum and we embarked on engagement in the six geo-political zones.
“One of the main outcomes we found is that people are concerned about their safety as a result of providing information.
“So, this bill is critical to ensure the effectiveness of the intention of the Whistle-blower Policy.”
Assault boats
Wednesday’s cabinet meeting also approved over N689. 72 million, inclusive of 7.5% VAT, for the design, construction and supply of nine fast, ballistic riverine assault boats for the Nigeria Customs Service.
Mrs. Ahmed said the approval also covers the procurement of nine patrol boats with all associated accessories.
She said the contract was awarded in favour of Messrs CIWA West Africa Ltd.
