The Minister of Finance, Budget and National Planning, Zainab Ahmed, said that there is a need for more fundamental legislative reforms for key taxing laws as it pertains to the enactment of the annual Finance Bill.
She stated this on Monday during a virtual public consultation for the Finance Act, 2020.
Ahmed noted that there are ongoing efforts to review and reform extant taxing laws.
She said, “It is important to note that the tradition of enacting annual Finance Bill does not preclude the need for more fundamental legislative reforms to our key taxing statutes.
“These laws are being reviewed and efforts to reform them are ongoing. For example, the PIB currently being considered by the National Assembly will fundamentally change the way in which our petroleum producing companies are currently being taxed under the extant Petroleum Profits Tax Act.
“In response to ongoing health and economic challenges caused by the COVID-19 Pandemic, we have adopted appropriate counter-cyclical fiscal policies to accelerate economic recovery from the recent recession, as well as to stimulate economic growth in key sectors of the economy.
“As we are aware, the COVID-19 pandemic triggered an economic downturn across most economies of the world. By the end of 2020, the world’s economy fell into recession with the contraction estimated at – 3.5 per cent, compared to global growth of 2.8 per cent in 2019.
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“The Nigerian economy was also impacted by the pandemic, reflected by the contraction in economic growth in the second and third quarters of 2020, respectively.
“Economic activities in the country are recovering gradually, reflected by a reduced contraction of 3.6 per cent in the third quarter of 2020, compared to the 6.1 per cent contraction in the previous quarter.
“Given the impact of the pandemic on the domestic economy, there was a clear need for proactive implementation of macroeconomic strategies that would support domestic revenue mobilisation, enhance investment inflow, stimulate job creation and restore the economy on the path of sustainable, diversified and inclusive growth.
“The Finance Act 2020 also consolidates on the fiscal reforms introduced in the Finance Act 2019. The Act has introduced 80 changes to about 14 different tax laws including the Company Income Tax Act, the Capital Gains Tax Act, Stamp Duties Act, Oil & Gas Export Free Zone Act, Customs & Excise Tariff Etc. (Consolidated) Act, Value Added Tax Act, amongst others.”
