Nigerians who want to open or maintain accounts with Deposit Money Banks will not have to provide their Tax Identification Number to do so.The Federal Government is also proposing raising the minimum online banking transaction that will attract stamp duty from the current N1, 000 to N10, 000.Organisations that pay their taxes not less than 90 days before the due date may also get bonuses between one and two per cent.
These are some of the proposals in the Tax and Fiscal Law (Amendment) Bill, also known as the Finance Bill, currently before the National Assembly.The executive bill seeks to amend the Petroleum Profit Tax Act, Customs and Excise Tariff Act, Company Income Tax Act, Personal Income Tax Act, Value Added Tax, Stamp Duties Act and the Capital Gain Tax.Chairman of the House Committee on Finance, James Faleke, while explaining each of the amendments, also listed their benefits to the economy.
Faleke said, “Excess dividend tax to apply only to untaxed distributions other than the profits specially exempted from tax and franked investment income“Small businesses with turnover less than N25m to be exempted from the Companies Income Tax. A lower CIT rate of 20 per cent to apply to medium-sized companies with turnover between N25m and N100m.”Other benefits include onus of two per cent of tax payable (medium-sized companies) and one per cent for large companies for early payment of CIT; introduction of thin capitalisation of 30 per cent of EBITDA for interest deductibility.
Any excess deduction can also be carried forward for five years.The lawmaker added that the meaning of ‘supply’ and definition of ‘goods and services’ had been expanded to cover intangible items other than land, among others.He stressed the amendments would also cover “specific requirement for VAT deregistration for discontinuing operations.”
Similarly, the CITN criticised parts of the bill.President/Chairman in Council of CITN, Olajumoke Simplice, stated that increasing the VAT rate from five per cent to 7.5 per cent might generate additional revenue to government but might also not address budget deficit if government expenditures were not under control.Minister of Finance, Budget and National Planning, Zainab Ahmed, in her presentation, noted that while the VAT rate would be increased, the state and local governments would get 85 per cent of the revenue, with the Federal Government getting only 15 per cent.
The minister also noted that the appropriation bill would now be accompanied with finance bill annually.