OrderPaperToday – Chairman of the Senate Committee on Finance, Adeola Olamilekan, has explained that there is more to the Finance Bill passed by the Senate than just Value Added Tax (VAT) increment.
Speaking to the press after the passage of the bill on Thursday, Adeola highlighted other areas in the bill that would improve businesses, transactions and the Nigerian economy in general.
He explained that the Finance Bill, which passed third reading in the Red Chamber on Thursday, contains seven finance bills consolidated into one.
They are Companies Income Tax Act, Value Added Tax Act, Customs and Excise Tariff etc (Consolidation) Act, Personal Income Tax, Capital Gains Tax Act, Stamp Duties Act and Petroleum Profit Tax Act.
He explained further that while small companies that generate less than N25 million are exempted from paying VAT, those who generate N100 million and below had their income tax reduced to 20% in the bill.
The lawmaker stated, “Also included in this Finance Bill, we now have reliefs for some small companies that if your revenue as a company is less than N25 million, you are exempted from payment of VAT.
“We also went a step further that if you are a company which we have tagged to be a medium company whose revenue is less than N100 million, your company income tax has been reduced from 30% to 20%.”
Adeola disclosed that activities in the capital market have been dormant but will now be revived with the passage of the bill.
Going further, he disclosed that with the passage of the bill, people can now use their shares to borrow money while dividend paid on those shares can be used as interest on money borrowed.
On online transactions with foreign companies, he said, “Long before now, billions of dollars of transaction happen on the internet.
“Companies not physically domiciled in Nigeria, people buy things on Amazon, Google,YouTube at zero cost.
“For us as a nation, no revenue derived.
“By passage of this Act, we have succeeded in putting in place a mechanism where all those e-commerce transaction, Nigeria can start gaining something from it. This is in accordance with global best practices.
“We have put a proviso there that it will be the duty of the minister to determine the substantial economic importance of this particular transaction in this country,” the senator stated.
He dismissed reports indicating that the federal government receives the lion share of gains derived from the increase of VAT.
“85% of what is collected goes to the state and local governments. Only a paltry sum of 15% stays with the federal government”, he added.