Finance Bill: FG, stakeholders differ on VAT hike, others

The Federal Government and critical stake holders in the Nation’s economy and financial sectors , disagreed Tuesday, on three out of the seven areas of tax regimes   the latter seeks amendments for in the bill.

 President Muhammadu Buhari had on October 8, 2019, during the presentation of the N10.33trillion to the joint sitting of the National Assembly , added the  finance bill to the budget for consideration and approval by the Federal lawmakers .

The seven areas of tax reforms the federal government proposed in the bill  are Company Income Tax 2004, Value Added Tax ( VAT) 2007, Customs and Excise Tariff 2004  , Personal Income Tax 2007, Capital Gains Tax 2007,  Stamp Duties Act 2004  and Petroleum Profit Tax 2004 .

In giving the  proposed tax reforms, legislative inputs, both Chambers of the National Assembly had penultimate week, passed the Finance Bill for second reading upon which a joint public hearing was held Tuesday with critical stakeholders in the Sectors .

But at the Public hearing session , while most of the stake holders , commended the federal government on the proposed tax reforms , some of them however disagreed with proposed upward review of Value Added Tax ( VAT) from 5% to 7.5 % , N50 stamp duties on all forms of transaction and percentage increase on Petroleum Profit Tax .

First to kick against the contentious areas of Tax reforms ,were the Oil Producers Trade Section ( OPTS) on what they called additional multiple taxes within the sector .

Specifically , OPTS  as submitted in a paper presentation  by its spokesperson, Mr Shobayo , “the introduction of 7.5- 10% withholding tax ( WHT)  on dividends paid out of petroleum profits  as contained in section 5& 26  of the bill , would increase  the tax liability in addition to the pre-existing 85% PPT rate and erode returns on investment.

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