OrderPaperToday – A Bill for an Act to make for incremental changes to Nigeria’s Tax and Fiscal Laws, also known as the Finance Bill, has been read for the second time on the floor of the Senate.
It would be recalled that President Muhammad Buhari mentioned the Finance Bill during the presentation of the 2020 budget on 8th October, 2019.
He stated then that the draft Finance Bill proposes an increase of Value Added Tax (VAT) rate from 5% to 7.5% and that the 2020 Appropriation Bill is based on this new VAT rate.
Wednesday’s second reading of the bill was, however, immersed in mild controversy as many senators complained that they had not seen a copy of the bill and that debating it is baseless.
Senator Binos Yaroe, while raising a point of order on the matter, said, “Our rules say that printed copies of the bill shall, as soon as possible, be sent to every senator.
“We are at the stage of the second reading of this bill. I don’t know for others but I have not received the bill, I don’t know how we can debate a bill that we have not received.”
Yaroe’s position was supported by other senators including Betty Apiafi and Senator J.T Sekibo.
In his comments, Senate President, Ahmed Lawan, said that it was the “convention and tradition” of the Senate to debate the general principles of bills without going through copies of the bill. He, however, assured that before the bill is read for the third time and passed, copies will be made available to senators.
While leading debate on the bill, the Senate leader, Yahaya Abdullahi, explained that the objectives the bill include the promotion of fiscal equity by mitigating instances of regressive taxation and reforming domestic tax laws to align with global best practices.
He added that the bill will introduce tax incentives for investment in infrastructure while supporting ongoing reforms aimed at improving the ease of doing.
Speaking further, Yahaya said the additional revenue from increased taxes will be used to fund health, education, and infrastructure.
He listed the tax laws covered by the Finance bill to include Company Income Tax Act, Value added Tax Act, Customs and Excise Tariff Consolidation Act, Personal Income Tax Act, Capital Gains Tax Act, Stamp duties Act, Petroleum Profit Tax Act.
The increase to taxes will not affect pharmaceuticals, educational items, white bread, cereals including maize, rice, wheat, millet, barley and sorghum, fish of all kinds, flour and starch meals.
Other exempted items are fruits, nuts, pulses and vegetables of various kinds, roots such as yam, cocoyam, sweet and Irish potatoes, meat and poultry products including eggs, milk, salt and herbs of various kinds, natural water and table water.
“It is necessary and essential to intensify the revenue generation of this administration and its commitment to ensuring that any inconvenience associated with fiscal policy adjustment is moderated such that the poor do not bear the burden of these reforms,” the Senate leader explained.
Senators who spoke in support of the Bill include Ibrahim Gobir, Bassey Akpan, Ayo Akinyelure and Sahabi Yau. They all noted in their various contributions that the bill was long overdue and its passage will boost government’s revenue.
In his remarks, the Senate President expressed hope that the eventual passage of the Finance Bill will reduce the spate of borrowing by the Federal Government.
He said: “Revenue is the major issue affecting our economy. Economies of most developing countries depend on public expenditure and until we are able to get enough revenue collected efficiently and effectively, we will be unable to properly fund public expenditure.
“We look forward to a time when the Federal Government will rely on its revenue within the country rather looking outwards for some support, loans or facilities.”
The bill was subsequently read for the second time and referred to the Senate Committee on Finance to report back in two weeks.