The Senate on Thursday passed the Finance Bill presented to it by President Muhammadu Buhari to raise the country’s Value Added Tax(VAT) from 5 to 7.5 percent.
The bill has five strategic objectives of promoting fiscal equity, reforming domestic tax laws and raising revenue.
The Bill is entitled, ”A Bill for an Act to Make for incremental changes to Nigeria Tax and Fiscal Law and for Other Related Matters therewith, 2019( SB 140).
The Amendments carried out were a total of fifty-six amendments of different existing Acts which include: Company Tax; Petroleum Profit Tax; Capital Gains Tax; Stamp Duty Tax; Personal Income tax and Customs and Excise Duty.
According to the Bill, a large sum of money realized from the taxation would go the states and local governments while fifteen percent will go the Federal Government.
The Finance Bill was read the third time and passed after the consideration of the report of the Chairman, Senate Committee on Finance, Senator Solomon Olamilekan Adeola, All Progressives Congress, APC, Lagos West.
The report read in part , “The bill has five strategic objectives, the first one is to promote fiscal equity by mitigating instances of regressive taxation. The second one is to reform domestic tax laws to align with global best practices. The third is to introduce tax incentives for investment in infrastructure. The fourth objective is to support ongoing ease of doing business reforms and the fifth objective is to raise revenues for government including proposal to increase the value-added tax (VAT) from 5% to 7.5%.
“The 2020 appropriation bill is based on the provisions of this bill. The additional revenues will be used to fund health, education and infrastructure programmes.”