The House of Representatives on Wednesday expressed support for the passage of proposed amendments to seven finance-related legislations namely Petroleum Profit Tax (PPT), Value Added Tax (VAT), Company Income Tax (CIT), Personal Income Tax (PIT), Customs and Excise Duty, Capital Gains Tax and Stamp Duties.
Other lawmakers who spoke on the bill are; Deputy Speaker, Hon. Idris Wase, Chief Whip, Hon. Mohammed Monguno, Hon. Aliyu Ibrahim and chairman, House Committee on Public Accounts, Hon. Wole Oke.
However, some lawmakers including Hon. Ossai Nicholas Ossai and Hon. Luke Onofiok warned against policies that are capable of inflicting undue hardship of the citizens and aggravate the unemployment rate in the country.
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Speaking on the intent of the bills, Chairman, House Committee on Finance, Hon. Abiodun Faleke explained that the move became necessary for the country to fund critical developmental projects at all levels as well as the precarious situation we find ourselves financially as a country and infrastructural development.
According to him, the Company Income Tax bill seeks to amend a total of 23 sections namely 9, 10, 13, 14, 16, 21, 25, 29, 31, 39, 40, 44, 54, 77, 81 and 105.
He added that the proposed amendments also seek to capture e-commerce operations that are not physically present in Nigeria into the tax net, including Apple, Facebook, Goggle, and others through which Nigerians spend several billions of naira daily.
Hon. Faleke also explained that the VAT Act seeks to amend 11 sections namely: 2, 4, 8, 10, 15, 16, 19, 28, 32, 35 and 46 with the view to increase the current 5 percent to 7.5 percent which he observed remains one of trillion lowest in the West African sub-region.
He observed that South Africa VAT is 15 percent, Ghana – 12.5 percent, Republic of Benin – 18 percent adding that Nigerians who engage in the shipping business in the Republic of Benin pay the 18% tax I to the country.
The lawmaker also disclosed that States and Local Government Areas are to benefit 50 percent and 35 percent of the revenue accruing from the new tax regime while the Federal Government is to benefit 15 percent.
He added that the proposed amendment to the PPT Act seeks to eliminate the tax exemption on profit accrued from the petroleum industry by ensuring payment of Withholding Tax (WHT).
On his part, Hon. Luke Onofiok who stressed the need to block all loopholes and leakages, called for provisions that will ensure that revenues accrued from various sectors are channeled into funding of education, health, and road infrastructure, just as he applauded the move to address the issue of multiple or double taxations which he described as bane of businesses in the country.
Hon. Onofiok who warned against the imposition of tax on the online transactions which has enabled Nigerian youths to be fully engaged and exhibit innovation, however, called for the provision of incentives for e-commerce.
Other members who expressed concern over the proposed VAT increment argued that the increase should correspond to the income earned by various strata of the society.
While most of the lawmakers expressed support for the proposed 7.5 percent increase against the current 5 percent, those lawmakers tasked the Federal government on the need to consider the different statuses of the citizens.
Leading debate on the specific sections of the bill, Deputy Majority Leader, Hon. Peter Akpatason submitted that the whole essence of the proposed legislation was to create an enabling environment for business in the country.
He said section 4 of the VAT Act seeks to substitute the ‘5 percent’ with ‘7.5 percent’ adding that section 2 of the VAT Act, Cap. VI, Laws of the Federation of Nigeria, 2004 was re-enacted to read “the tax shall be charged and payable on the supply of all goods and services in Nigeria other those listed the first schedule by this Act.”
Hon. Akpatason explained that for the purposes of this act, goods and services shall be deemed to be supplied in Nigeria if “the goods are physically present in Nigeria at the time of supply, imported into Nigeria for use by a person assembled in Nigeria or installed in Nigeria.
“The beneficial owner of the rights in or over the goods is a taxable person in Nigeria and the goods or right thereof is situated, registered or exercisable in Nigeria.”
Meanwhile, Hon. Ossai Nicholas Ossai who frowned at certain provisions in the bills, called for caution before the passage of the bill because many aspects of the bill touched on the lives of the masses.
“The majority of the nation’s roads were in deplorable condition and we may argue that flying is a luxury but even the common man sometimes fly because of the menace of kidnappers on the road. I think we should delay this bill and take a more critical look at it,” Hon. Ossai noted.
However in his response, the Deputy Speaker, Hon. Idris Wase said every observation on the bill should be reserved for a public hearing because of the issues addressed in the bill were too important for the economy to be put in view.
While ruling on the bill, Speaker of the House of Representatives, Hon. Femi Gbajabiamila referred it to the Committee on Finance for further legislative action.