Finance Bill: FG Won't Introduce New Taxes, But Push For Banks To Charge Stamp Duties

There will be no new taxes in 2021 compared to this year, neither will the Federal Government increase taxes, according to the minister of finance, budget and national planning, Zainab Ahmed, but the President Muhammadu Buhari-led administration will push for banks to charge stamp duties on electronic receipts.

Ahmed's comment on taxation for next year is in line with the government's yearly finance bill which consists of tax laws used to improve tax generation for the financing of the budget. The government is set to release the finance bill 2020 for the 2021 budget.

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At a public hearing organised by the House of Representatives committee on finance in Abuja, Ahmed disclosed that COVID-19 pandemic and fall in prices of crude oil prevented the decision to increase taxes or introduce new ones, "What we don’t have in the finance bill 2020 is an increase in tax. There are no new taxes that are being introduced and there is no increase in taxes."

"The bill also make provisions to create a legal framework for the creation of a crisis intervention fund that will address crisis that may arise in future, while introducing provisions that allow for the recovery of donations made towards the COVID-19 pandemic and other potential crises.” Ahmed said.

What The Government Plan To Do To Taxes

Ahmed said reform around tax will focus on non-resident companies that have a significant economic presence in Nigeria. The government has been pondering on how to tax companies like Facebook, Netflix and other technologically-driven companies that don't have a physical presence within the country.

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Also, FG will solicit legislative support for banks to charge stamp duties on electronic receipts, which means Nigerians will be charged for transactions done via mobile phone, Automated Tell Machine (ATM), and POS service.

While the government plan to tax non-resident companies and push for stamp duty charge by banks, small businesses will be exempted from tax and reduce their Value Added Tax (VAT) compliance burden. It was also gathered that there will be tax incentives for infrastructure and the capital market.

“We also need to defer tax rate increases to the domestic economic sufficiently recover and reduce the compliance burden on taxpayers in line with the ease of doing business reforms,” Ahmed said.