The Federal Government has stated that no new taxes will be introduced, nor tax waivers granted under the 2020 Finance Bill.
The FG said the tax stance was due to the effects of the pandemic on the economy. This was disclosed by the Executive Secretary, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, and the Minister of Finance, Zainab Ahmed, at a virtual meeting on the Finance Bill 2020 Public Consultation in Abuja on Friday.
Mr. Nami said that the economy was facing challenges caused by the pandemic, so the FG had no plans to introduce new taxes; however, it would not grant tax waivers to businesses. “The economy is not doing very great because of the impact of COVID-19 and all other challenges so ordinarily government should be spending more money.
However, government is not able to raise the taxes; in the same way, we still balance the budget to reduce the deficit as much as possible. Therefore, there will be no new waivers,” he said.
Nami said that the African Continental Free Trade Area (AfCFTA) agreement would increase Nigeria’s trade volumes and be a boost for the economy. Nami added, “However, in anticipation of the AFCFTA, it is expected that the volume of trade will surge…and, as such, even though it will not significantly affect revenue being collected currently by government, it will have a way of making the economy increase significantly.”
Mrs. Ahmed disclosed that the public engagements with businesses was to prepare them for the new tax bill as Nigeria prepares for the AfCFTA where Nigerians goods will compete with the rest of Africa.
“The essence was to ensure that local industries grow because once the African Continental Free Trade Area (AfCFTA) takes effect our borders will be opened and we will have goods from other countries competing with goods in Nigeria,” she said.
This is being reinforced in the 2021 proposal by removing completely for the small businesses the obligation to pay education tax.