Saturday, March 06, 2021 / 07.00PM / Bukola Akinyele-Yisau for
WebTV / Header Image Credit: NBCC
As part of its advocacy role of government policies and the impact on businesses and the Nigerian economy, the Nigeria-British Chamber of Commerce (NBCC) recently hosted a forum to examine the finance Act 2020.
Mr. Kayode Falowo President of NBCC in his opening remarks, said the finance Act which was passed to provide economic recovery and resilience through the nation's fiscal space, is a topical issue at the moment in Nigeria.
He said, the Finance Act aimed to address ambiguity and provide clarity to certain provisions, and support companies with incentives to mitigate the impact of COVID 19.
According to the NBCC President, he said there had been several reactions from different stakeholders, analysts, and commentators concerning the finance Act.
He said it was important to understand the key changes and their effect on the general economic outlook and how the changes will affect individuals, business owners, and top managers in any organization of the Nigerian economy.
The Moderator of the NBCC Finance Act 2020 event Mr. Olasunkanmi Adenuga said the Finance Bill amended about 14 principles on tax-related legislation, which include boosting government revenue and also streamlining areas of regulatory conflict as well as addressing certain ambiguities. It is also to provide relief to Small and Medium Enterprises, expand the crisis intervention fund, and adopting an unclaimed trust funds strategy.
Mr. Theophilus Emuwa, Managing Partner, AELEX shared his views on the Finance Act 2020. According to Emuwa, the 2020 Act was a continuation of the 2019 Finance Act.
Enuwa said the finance Act needs to amend some of the challenges facing businesses in the country. The main legislation was still the same and needs to change.
He added that the annual review of the finance Act was a positive step for the government. "From 1999 to 2020 amendment in the finance act was slow to happen. In terms of direction, the government has been struggling with revenues and resources to do its job. In 2020, the VAT was increased from 5% to 7.5% which was the first time VAT had been increased since 1993" Emuwa said
Mr. Taiwo Oyedele. the Fiscal Policy Partner and West Africa Tax Leader at PwC, said the Finance Act was not a perfect piece of legislation, but came at a time the government faced the challenges of low revenues for the economy.
Apart from low revenues, the tax expert noted that there was a need for the government to increase expenditure in such areas as providing palliative to vulnerable sectors of the economy and exploring fiscal measures to stimulate business.
He also believed in the need for the government to increase its capacity in handling fiscal responsibilities and improving the procurement process.
Oyedele lauded the initiative of the government in signing the Finance Act. He emphasised the need to get state-owned enterprises (SoEs) to work effectively.
According to him "The impact on Small businesses is that they were exempted from the Company Income Tax (CIT) in the finance Act 2020 and they were equally exempted from Value Added Tax (VAT) on their goods and services. Also, there was an exemption of minimum wage earners from Personal Income Tax (PIT). The exemption on minimum wage from PIT was the most impactful policy in the finance Act, alongside the deduction of import duties and levies on vehicles and also an exemption of VAT on airline tickets and unclaimed trust funds; all these were significant aspects of the Finance Act".
Oyedele said that the tax authorities in Nigeria could leverage technology to improve the ease of doing business. He said what individuals need to do was to understand the laws around taxation, and the need for taxpayer groups to come together and engage policymakers and lawmakers in tinkering with the Act.
The PwC West African leader said the finance Act should be seen as a work in progress, with better proactive rather than reactive steps.