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The desire to encourage businesses and Nigerians may have forced the Federal Executive Council (FEC) into approving two Executive Orders and five Amendment Bills to the country’s tax policies targeted at reducing tax burden on Nigerians and further, boost ease of doing business.
This was disclosed by the Minister of Finance, Mrs Kemi Adeosun, while briefing State House correspondents at the end of the Council’s meeting which was presided over by President Muhammadu Buhari at the presidential villa, Abuja on Wednesday.
The two approved Executive Orders are: Value Added Tax Act (Modification) Order and Review of Goods Liable to Excise Duties and Applicable Rate Order while the five Amendment Bills include the Companies Income Tax Act (Amendment) Bill and Value Added Tax Act (Amendment) Bill.
Others are Customs, Excise, Tariff ETC (Consolidation) Act (Amendment) Bill; Personal Income Tax Act (Amendment) Bill and Industrial Development (Income Tax Relief) Act (Amendment) Bill.
According to the minister the approval followed the presentation of a memorandum to seek the consideration and approval of the Council for the report of the National Tax Policy Implementation Committee on Tax Laws Reform.
You may recall that FEC had on Feb. 1, 2017, approved the revised National Tax Policy in order to have a robust tax system targeted at promoting investment and further, improve revenue for sustainable national development.
The minister insisted that the new tax policies were targeted at removing obsolete, ambiguous and contradictory provisions in the laws, increase government revenue and simplify the process of paying taxes and doing business.
She said:“Majority of the provisions approved today are actually removing the tax burden and clarifying obsolete and ambiguous areas of tax. So for example for VAT there is to be exemption for residential property, leases on rental, transport for the general public and life insurance.
“These are areas that previously were VAT-able and what was approved today was that these areas should be removed, then, they shouldn’t be subject to VAT.
“In the short term of course that means a revenue lost for government. But we think in the long run that is the right thing to do is improving ease of doing business and reducing the tax burden on our people which is really one of the objectives of this government,’’
On the proposed amendment to the Company Income Tax aimed at reducing the Right of Tax on Micro, Small and Medium Enterprises (SME) from 20 per cent to 15 per cent.The government is working at promoting micro,small and medium Enterprises which has greater impact on the populace.