The Senate has passed the Finance Bill made up of 56 amendments from 7 different Acts.
Chairman Senate Committee on Finance, Senator Solomon Adeola, who made this known at a news conference after plenary in Abuja, said the amended Acts are: Companies Income Tax Act and Value Added Tax (VAT) Act.
Others are the Petroleum Profit Tax Act (PPTA), Personal Income Tax Act, Capital Gains Tax Act (CGTA), Customs and Excise Duty, and Stamp Duty.
According to him, 26 amendments were sought from Company Income Tax, 8 from Personal Income Tax, and 14 amendments from Stamp Duty.
“On Custom and Excise Duty, one amendment was sought, another one on Petroleum Profit Tax and four amendments on Value Added Tax“.
The Chairman reiterated that the Finance Bill passed was not just about VAT alone, but also aimed at creating an enabling business environment to alleviate tax burden for small and medium enterprises.
“Yes, VAT has become a major concern because of the increment sought for from 5 to 7.5 per cent, but also included in this Finance Bill, we now have a bill for some small companies whose revenues are less than N25 million to be exempted from VAT and tax payment.
“We went further that a medium scale company with revenue less than N100 million should have a reduction in its company’s income tax from 80 to 20 per cent.
“With this single action of passing this bill, the capital market has been reactivated and shares can be used to borrow money; dividends paid on the shares can be used as interest on the money borrowed,“ he said.
The chairman assured Nigerians that the increased VAT was not a random act but a well thought out process with comparison from other countries.
He pointed out that 85 per cent of the VAT goes to the Local and State Governments, with only 15 per cent for the Federal Government.
“We are not after putting any untold hardship on the common man; a lot of goods that VAT should be charged on have been exempted because of the less privileged.
“If you decide to eat in a hotel or restaurant rather than cook at home, then VAT is charged because that is luxury, “he said.
He also said the passage of the bill has put in place a mechanism to generate revenue for the government from e-business transactions that are in accordance to global best practices.
“It will be the duty of the minister to determine the substantial economic importance of this particular transaction,” he said.
For his part, Sen. Orji -Ujor Kalu (APC Abia), however, stated that the bill which was about Nigerian people was not design to tax the poor but on luxury goods.
Senator Gabriel Suswan (PDP Benue) said some of the amendment sought in the bill would definitely affect Nigerians.
He, however, urged the Federal Government to put in place a social safety net to mitigate the effect of the increase on VAT.
YPP Anambra, Senator Ifeanyi Ubah, said the amendment sought on the petroleum income tax would create additional challenge to stakeholders in the industry.
He said the petroleum industry was not growing the way it should; hence the amendment would pose additional challenge to the sector.
He also said industry players in the sector were not invited to make input on the bill.
President Muhammadu Buhari submitted the Finance Bill to the Joint Session of the National Assembly on October 14.