Follow Us on Google
Omodele Adigun
Nigerians have been urged to take the advantage of incentives in the Finance Act to help grow the economy as the initiative will open up Foreign Direct Investments (FDIs) inflows into the country.
According to a financial analyst/CEO of Armlink Ventures, an investment management firm, Alhaji Mamman Kolo, ‘the provisions of the Act have the capacity to boost the economy by stimulating the growth of micro, small and medium scale enterprises (MSMEs) and encourage foreign direct investments(FDIs)’.
Kolo, who stated this in Lagos at a tax seminar organised by Okwudili Ijezie & on Finance Act 2019: Challenges and Opportunities also urged the public to further familiarise themselves with the various amendments to tax laws as contained in the Act, and how to be able take advantage of the incentives to avoid, rather than , evade tax.
He stated: “The World Bank recently published its 2020 Report on Doing Business which shows that Nigeria moved up 15 places from its 2019 ranking in the Ease of Doing Business Index. Paying taxes is one of the 12 indicators considered in the report, which measures payments, time, and total tax and contribution rate for a business to comply with all tax regulations as well as post-filing processes.To consolidate, Nigerian tax authorities must continue to implement policies and practices that would engender business growth in the country. Such policies should reflect global trends that can attract foreign direct investment, encourage businesses to pay their share of taxes, institute best tax practices and, ultimately, contribute to achieving the Federal Government’s tax-to gross domestic product target ratio of 15 per cent by 2023 as against current levels of less than 10 per cent. Taxes are a very significant component of government revenue and therefore the efficient management of same affects proper functioning of the public sector.
The Finance Bill 2019 was presented to the National Assembly along with the 2020 Budget in October, 2019 by President Muhammadu Buhari. The President signed the bill into law on the January13, 2020. Important highlights of the Act includes the following: Tax relief for Micro, Small and Medium scale enterprises (MSMEs) by way of either 0 per cent tax or reduction in the tax rate to 20 per cent. Minimum tax provisions amended to 0.5 per cent of turnover and exemption only applies to small companies (less than 25m turnover). This implies that non-resident companies will now pay minimum tax. Widening the tax base for Non-Resident Companies (NRCs) engaged in digital activities, consultancy, technical, management or professional services in Nigeria Incentive of 1 per cent or 2 per cent on early payment of company income tax (CIT) depending on whether the company is a medium or large company if taxes are paid at least 90days before due date.
