The Federal Executive Council of the Federal Government of Nigeria has approved a bill that seeks to subsidise import duties on tractors, buses and other motor vehicles.
According to the Minister of Finance, Budget and National Planning, Zainab Ahmed, the bill which was approved on Wednesday, will now be moved to the National Assembly for consideration and assent.
Ahmed explained that the need to reduce food inflation figures through one of the causative factors of high production cost, transportation, inspired the bill.
The minister said that the bill also seeks to cut down taxes in some areas, especially for small businesses, in addition to those already reduced in the 2019 finance bill.
She further explained, “In producing this bill, what we were inadvertently doing was amending provisions in 13 different taxes which include the Capital Gains Tax Act, Companies Income Tax Act (CITA), Industrial Development (Income Tax Relief) Act (IIDITRA), Personal Income Tax Act (PITA), Tertiary Education Trust Fund Act, Customs & Excise Tariff (Consolidation) Act, Value-Added Tax Act (VATA), Federal Inland Revenue Service (Establishment) Act, the Fiscal Responsibility Act and the Public Procurement Act.
“Some highlights of these provisions include amendments that we have had to make to provide incremental changes to tax laws.
“These amendments include providing fiscal relief for corporate taxpayers, for instance by reducing the applicable minimum tax rate for two consecutive years. So from 0.5 per cent to 0.25 per cent.
“These reforms will commence and will also be closely followed by the cessation rules for small businesses as well as providing incentives for mass transits by reducing import duties and the levies for large tractors, buses and other motor vehicles.
“The reason for us is to reduce the cost of transportation which is a major driver of inflation especially food production.
Assuring that there will be no increase in taxes, the minister disclosed that provisions are being made for intervention funds during crises.
She added, “We have also proposed measures to create a legal instrument that supports a crisis intervention fund such as the crisis intervention that we have had to put in place for COVID-19.
“So we hope that we don’t have other crises but we need to create such a fund so that it is available and it is legislated.
“We are also amending the Fiscal Responsibility Act to enhance fiscal efficiencies and also to control the cost revenue ratios of government-owned enterprises so that we will be able to realize more operating surpluses from these enterprises.”