If the Finance Bill submitted by President Muhammadu Buhari is passed by the National Assembly, it would remove the tax exemption on dividends paid from the profits of oil companies.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, disclosed this in a statement issued on Tuesday.
The statement was issued by the minister’s Special Adviser Media and Communication, Yunusa Abdullahi.
The Finance Bill, which has passed the second reading at the Senate, was presented to the joint session of the National Assembly on October 14 2019.
The President forwarded the Finance Bill 2019 for passage into law by the Senate pursuant to sections 58 and 59 of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).
Ahmed, in the statement, said, “This bill seeks to improve revenue by removing the tax exemption granted for dividends or income received from companies charged under Petroleum Profits Tax Act.
“The bill contains some changes to the Companies Income Tax Act, Value Added Tax Act, Petroleum Profits Tax Act, Personal Income Tax Act, Capital Gains Tax Act, Customs and Excise Tariff Act and Stamp Duties Act.
“The bill also seeks to address the taxation of industries, such as insurance, start-ups and the capital markets, evaluated by the Federal Government as critical to the growth and development of the Nigerian economy with a view to stimulating activities in those sectors and fostering overall economic growth.”
She commended the speed and commitment with which the National Assembly had considered the bill.
Providing clarity on some of the amendments to be made with the bill, Ahmed said it sought to provide efficiency in the administration of individual income taxes in Nigeria.
On Capital Gains Tax, she said the amendment would cover the taxation of business combination and prevent abuse of provision of the Act on group restructuring.
In the area of stamp duties, the minister said the new bill sought to increase revenue generation from duties on electronic stamps.
The minister said the annual budget would always be accompanied by finance bills to enable the realisation of revenue projections.
She said, “Future finance bills will therefore also provide us with additional opportunities to incrementally improve the fiscal policy and regulatory/legal environment in order to further strengthen our domestic capital market, and ultimately ensure sustained and inclusive growth and development.
“It is our hope that the bill will be enacted by the National Assembly as soon as possible to support the implementation of the 2020 Appropriation Act.”