Minister of Finance, Mrs Zainab Ahmed, has said that the Finance Bill 2019 signed into law by President Muhammadu Buhari, on Monday, has palliatives for Micro, Small and Medium Enterprises, MSMEs and ordinary citizens.
Economists and organised labour had reacted to the Act with concerns, noting that the increase in the Value Added Tax, VAT, which from 5 per cent to 7.5 per cent would negatively impact businesses and make life more difficult for the Nigerian public.
But the minister, in a statement by her Special Adviser on Media and Communication, Mr Yunusa Abdullahi, explained that measures had been put in place in the Act to address such concerns.
The Act, she said, “has taken care of essential palliatives to support MSMEs and mitigate the impact of the VAT rate increase on the most vulnerable businesses, communities and citizens in the economy.
“Some of these measures include: Expanding the list of VAT-exempt items (e.g. basic food items, educational materials and medical supplies); Introducing a VAT registration threshold for MSMEs with a turnover of less than N25 million per annum; Reducing the corporate tax rate for MSMEs from 30 percent to 20 percent for Small firms (with turnover of between N25 million and N100 million per annum.); and exempting micro-firms (with turnover of less than N25 million per annum).”
On the implementation process of the Act, Ahmed said that she would issue a statement in due course.
The minister said that the strategic objectives in the Act took cognisance of the crucial relationship between fiscal policy, the regulatory environment and the strong capital market we all seek to effect in Nigeria.
According to her, going forward, the annual budgets of the Federal Government would always be accompanied by Finance Bills in order to achieve the revenue projections.
The Act provided for amendments to certain provisions of existing tax laws, including Companies Income Tax Act, CITA, 2004; Personal Income Tax Act, PITA, 2007; Value Added Tax Act, VATA, 2007; Petroleum Profits Tax Act, PPTA; Stamp Duties Act, SDA, 2007; Customs and Excise Tariff Act, 2004; and Capital Gains Tax Act, 2007.
