•May be passed with 2022 appropriation bill next week
Deji Elumoye and
Juliet Akoje in Abuja
Less than 24 hours after President Muhammadu Buhari transmitted the 2021 Finance Bill to the National Assembly for consideration, the Senate passed the bill for second reading at yesterday’s plenary.
The bill alongside the 2022 Appropriation Bill may be passed by the upper chamber before proceeding on yuletide break next week, a ranking Senator told THISDAY after plenary.
The Senate Committee on Appropriation chaired by Senator Barau was expected to lay the report of the Appropriation Bill before the Senate during plenary next Tuesday and by next Wednesday the 2022 budget would have been passed by the upper chamber.
President Buhari, in the Finance Bill accompanying letter to the Senate on Tuesday, had explained that the request for the passage of the Finance bill was made pursuant to the provisions of Sections 58 and 59 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
According to him, it seeks to support the implementation of the 2022 Federal Budget of Economic Growth and Sustainability by proposing key reforms to specific taxation, customs, excise, fiscal and other relevant laws.
Buhari stated that upon passage, the bill would accelerate International Tax Reforms to enhance the taxation of non-resident individuals and companies that nevertheless derive profit from Nigeria; and implement Financial Sector Reforms to support ongoing capital market reforms relating to Securities Lending Transactions, Real Estate Investment Trusts, Init Trust Schemes and the recapitalisation of Insurance Companies.
Sponsor of the bill, the Senate Leader, Senator Yahaya Abdullahi, while leading debate on the general principles of the bill, said the finance bill seeks to amend seven different tax laws.
According to him, the amendment would promote fiscal equity, reform domestic tax laws to align with global best practices, introduce tax incentives for investments in infrastructure and capital markets, support MSMEs, and raise revenues for government.
He added that some areas which the legislation seeks to amend, are the contentious commencement and cessation rules in the Companies Income Tax Act.
“The effect of these rules is that companies suffer tax twice on profits of at least 12 months, when they commence business. Conversely, on cessation of business, a period of up to 12 months escapes tax.
“The removal of these rules is considered a welcome development.
“Anti-avoidance provisions for business reorganization CITA empowers the FIRS to grant certain exemptions on group reorganisations, where certain criteria are fulfilled”, he explained.
Abdullahi stated that the Finance Bill also seeks to amend the Personal Income Tax for the removal of conditions attached to tax exemptions, the introduction of penalty for failure to deduct tax, and provision of Tax Identification number for opening bank accounts by individuals.
The amendment also seeks make pension contributions tax-deductible without recourse to, and the approval of the Joint Tax Board.
According to the ranking Senator: “Quite significantly, the Finance Bill seeks to introduce sweeping changes to the tax laws covering seven different tax laws.
“Many of the changes are expected to have positive impacts on investments and ease of paying taxes especially for MSMEs.
“Going forward, we hope that changes to the tax laws will be on an annual basis to ensure that Nigeria’s tax system continues to evolve in line with economic conditions.
“Mr. President, Distinguished Colleagues, I believe that this Bill is tailored to meet the critical needs of this country at this point of our democratic evolution and economic situation”.
The Finance bill after consideration, was thereafter referred by the Senate President, Dr Ahmad Lawan, to the Committees on Finance; Customs and Trade and Investment to report back next Tuesday.
Also yesterday, three bills also passed second reading during plenary
They included a bill to amend the Administration of Criminal Justice Act 2015; a bill to establish the University of History, Archeology and Education, and a bill for an Act to provide for the settlement of certain civil disputes by conciliation, mediation and traditional dispute resolution mechanism.
The bills were sponsored by Senators Orji Uzor Kalu (Abia North), Oyelola Yisa Ashiru (Kwara South), and Mohammed Sani Musa (Niger East), respectively.
The bills after consideration were referred to the Committees on Judiciary, Human Rights and Legal Matters; and Tertiary Institutions and TETFUND with four weeks uktimatum to report back to plenary.
