FG considers another tax exemption for small businesses
The Federal Government has proposed the exemption of small businesses from paying tertiary education tax in its draft Finance Bill 2020.
This was revealed by the Fiscal Policy Reforms Committee, established by the Ministry of Finance, Budget and National Planning and chaired by the Special Adviser to the President on Economic Matters, Dr Adeyemi Dipeolu.
According to the Chairman, Drafting Sub-committee and member of Fiscal Policy Reforms Committee, Mr Ajibola Olomola, the proposal for Finance Bill 2020 "is to introduce an amendment to the Tertiary Education Tax Act to exempt small businesses from Tertiary Education Tax".
The committee said that currently, all companies in Nigeria are required to pay TET at two per cent of assessable profits for each year of assessment.
It further noted that the Finance Act 2019 introduced companies income tax exemption for small businesses.
"However, in line with the Federal Government objective of incentivising small businesses, there is a need to introduce a similar exemption for TET," Olomola said during a virtual consultation with stakeholders on Friday.
The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed said the President had noted during his 2021 executive budget presentation speech that the Finance Bills aim to;
"support the realisation of our 2021 revenue projections and that we will be adopting appropriate counter-cyclical fiscal policies that will enhance the efficiency of fiscal incentives".
The committee also said there is a proposal to introduce legislation to empower the Federal Inland Revenue Service to deploy technology for general tax administration. It also proposed penalties for breach by tax officials of taxpayer confidentiality.
"The Finance Bill 2020 will include certain provisions that allow the tax authorities to deploy information technology for the collection of taxpayer information of tax and reduce the cost of collection.
"In light of this proposal, stringent rules are also proposed to secure taxpayer confidentiality from unauthorised third parties.
"The Finance Bill 2020 will look to introduce significant penalties for breach of data confidentiality by tax officials", Olomola said.
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