Senate Okays Finance Bill 2021

….Gives more powers for the FIRS to collect NPTF levies on Nigerian companies

The Senate at plenary on Tuesday passed the Finance Bill 2021 which was transmitted to the National Assembly by President Muhammadu Buhari, on December 7, 2021.

It sought more powers for the Federal Inland Revenue Service (FIRS) to collect NPTF levies on Nigerian companies on behalf of the fund and to streamline tax levy collection from Nigerian Companies in line with President Buhari administration’s ease of doing business reforms.

The Joint Committee also harped on the need for the federal government to ensure that the FIRS deploys both proprietary and third-party tech applications to collect information from taxpayers, enhance confidentiality and non-disclosure and to enable them investigate tax evasion and other crimes and sanction non-compliant tax payers.

It further called for the FIRS to be empowered to assess non-resident firms to tax on fair and reasonable turnover basis on turnover earned from digital services to Nigerian customers, with a further mandate to appoint persons for the purpose of collection and remittance of non- resident taxes.

The Committee demanded necessary reforms on securities lending transactions, minimum tax for insurance companies and companies in general, taxation of unit trust income, real estate investment trust and insurance companies’ capitalisation by NAICOM in line with Tax Equity.

It urged the government to mandate the FIRS as principal tax revenue collection agency to collaborate with other law enforcement MDAs in streamlining tax collections by enhancing public financial management reforms.

According to the Joint Committee, doing so would reduce revenue leakages and better track actual expenditure to revenue performance in line with the provision of the Constitution of the Federal Republic of Nigeria 1999 (as Amended), Fiscal Rules and other Extant Money Acts.

It also called for the diversification of Nigeria’s revenue from oil to other sectors to fund critical expenditures.

The Committee while demanding an increase of 0.5 percent in educational tax, pushed for close monitoring of unfolding development and policies on VAT, tax incentives, projected increase in tariff on tobacco, alcohol and carbonated drinks to fund vital expenditure on health, education and security, with a possibility of introduction of new taxes, tariffs and levies as the economy recovers.

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