FG to cut down taxes for MSMEs-Finance Minister
by Oru Leonard
The Federal Government, has announced plans to cut down taxes for poor citizens as well as operators in the Micro, Small and Medium Enterprises in the country.
According to reports by the Sight News, The Minister of Finance, Zainab Ahmed made the announcement on Monday, in Abuja, during a world press conference on the activities of the Federal Ministry of Finance as well as agencies under the ministry.
Ahmed, noted that the action to cut down on taxes of the poor and the MSMEs, was to alleviate their pains and encourage operators in the sector, adding that the announcement became necessary, to clear the air on speculations that have been making the rounds, that the Government was planning to raise taxes in 2019.
The Sight News recalled that the Finance Minister, had last week promised to raise tax collection through ensuring that all high-net-worth individuals who at the moment are not paying their taxes, are captured in the enlarged tax net.
She also declared that henceforth, all heads of revenue generating agencies in the country are to be held accountable for revenue under- performance, as part of strategies to combat failing revenue target.
On the tax reform plan, the Minister said, “We are not in any way increasing our tax rate, but collection. If anything, we are reducing taxes paid by the Micro, Small and Medium Enterprises ( MSMEs), as a way of encouraging the growth of businesses.
“What the new reform seeks to achieve is targeting high-net-worth individuals who do not pay taxes. We are also going to implement the luxury item taxes which approval has since been received, but for which implementation is yet to begin,” she added.
As a prelude to the action next year, the Minister recalled that she had recently constituted eight Tax Appeal Tribunals (TATs) across the nation to accelerate the resolution of over 209 pending cases relating to tax revenues of about US$18.804 billion, N205.654 billion and €0.821 million. This is critical to ensure that tax payers get a fair hearing and expedite resolution of tax disputes.
Furthermore, she explained that the tax dispute resolution mechanism, will reduce incidences of tax evasion and improve payers confidence whilst ensuring fairness and transparency of tax.
Ahmed, gave more insight into the new tax reform plan, “To take advantage of innovative technologies, we plan to leverage data, technological tools & platforms to foster collaboration, grow the revenue base and improve collections. Given the span of stakeholders that form our port community and for the sake of improving ease of doing business, we plan to deploy a national single window/trade platform that we expect to enhance customs collections to about 90 percent over a few years.
“We will also improve collaboration between our revenue collection agencies including the Nigerian Customs Services (NCS), Federal Inland Revenue Service (FIRS) and other trade partners to share information and intelligence that will help improve revenue and make collections more efficient.
She added, that, “The tax initiatives spearheaded by FIRS also include the automation VAT collection at source in some key sectors”.
Furthermore, she said, “To improve accountability and ultimately improve the performance of Government Owned Enterprises (GOEs), the expenditure plans of these entities are being digitalised and reviewed. This initiative will be backed by a more proactive revenue tracking and monitoring mechanism.
Finally, we will continue to invest in the capacity building of the financial system (in terms of tools, people & skills) so that we can optimally manage the finances of this country from both the revenue and expenditure perspectives.”
Reviewing the Federal Government’s expenditure performance in the year 2018, the Minister said despite the revenue shortfall, Government was able to pay salaries and service debts 100%, which included Paris club over deductions: $5.4 billion; Joint Venture (JV) Cash Call: $6.8 billion ; Contractor/Export Expansion Grant (EEG): N1.9 trillion; Refund to States for roads: N488 billion.
“The Ministry of Finance, recently made the following payments among others: Through the Pension Commission (Pencom), we have paid the sum of N54 billion to settle outstanding pension arrears from 2014, 2015 and 2016, as well as paying pensions claims up to March 2017. We have also paid over 2,000 former workers of our defunct national carrier- Nigeria Airways Limited and we are making monthly payments of 9,215 former workers of NITEL/Mtel after over 12 years via Pension Transitional Arrangement Directorate (PTAD).
“We also paid over N571m as gratuity and arrears to 174 Biafra War Affected Retired Police Officers (WARPRO) in October 2017”, she ended.
