The 2020 finance bill seeking to reduce import levy on
buses, tractors and other motor vehicles has passed first and second reading at
the senate.
The proposed law passed first and second reading on
Wednesday after the senators gave it a special consideration.
A letter by President Muhammadu Buhari asking the national
assembly to pass the bill was only read on the floors of the house of
representatives and senate on Tuesday.
Normally, when a bill is read for the first time, a day is
fixed to debate the general principles of the legislation after which it will
be passed for second reading.
But speaking at the senate on Wednesday, Yahaya Abdullahi,
senate leader, said special consideration should be given to the bill because
of its importance to the economy.
While leading his colleagues to debate the bill, Abdullahi
said the legislation is seeking to “provide fiscal relief for taxpayers by
reducing the applicable minimum tax rate for two consecutive years of
assessment.”
The senate leader said the bill is also seeking to amend the
procurement act to implement key procurement reforms previously proposed by the
national assembly in 2019.
“The Capital Gains Tax Act is amended at section 36(2) of
the CGTA to the extent that exemption on tax liability for compensation for
loss of office which was hitherto limited to N10, 000.00 is now extended to
N10, 000, 000.00,” he said.
“There is a new section 32 which provides that no tax shall
apply to any trade or business transferred to a Nigerian company for the
purposes of better organization of that trade or business.
“Section 4 of the Value Added Tax (VAT) act has been amended
by increasing the value added tax payable by consumers from 5% to 7.5%. Section
19 increased the penalty payable by a taxable person for non-remittance within
the specified period from 5% to 10%.
“Under section 28, the penalty for failure to give notice of
change of address or permanent cessation of business was increased from N5,000
to N 50,000 in the first month and N25,000 in subsequent months.
“There is a new section 8 of the VAT Act to cater for the
registration of a taxable person upon commencement of business.
“The penalty for failure to register has been increased from
N10,000 to N50,000 in the first month and from N 5,000 to N 25, 000 in the
subsequent months.”
The senate leader said the bill also seeks to boost small
and medium scale enterprises by reducing tax burden on them.
However, Ike Ekweremadu, senator representing Enugu west,
said the bill must not be hurried.
“It is important that we put it to a public test and see
what the Nigerian people will say. We must ensure that the people of Nigeria
are carried along,” he said.
The bill passed second reading after it was put to a voice
vote by Senate President Ahmad Lawan.
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