A Taxation Expert, Mrs Morenike Babington-Ashaye, has advised Nigerians to support the full implementation of the Finance Bill 2019 signed into law by President Muhammadu Buhari on January 13, 2020.
Babington-Ashaye, also President, International Centre for Tax Research and Development, gave the advice on Tuesday while addressing newsmen in Lagos.
The new Finance Act is meant to reform the country’s tax laws, aligning them with global best practices, support MSMEs, encourage investments in infrastructure and capital markets, and increase revenue for the government.
Babington-Ashaye tasked the Corporate Affairs Commission (CAC) and other tax agencies to closely monitor the companies doing businesses in the country to guide against sabotage of the new law.
She said there was the need for people to adequately abide by the principles of the Act.
The Act has five strategic objectives including: promoting fiscal equity by mitigating instances of regressive taxation and Reforming domestic tax laws to align with global best practices;
Other provisions are: Introducing tax incentives for investments in infrastructure and capital markets; Supporting Micro, Small and Medium-sized businesses in line with our Ease of Doing Business Reforms; and Raising Revenues for Government.
It also seek to increase the VAT rate from five per cent to 7.5 per cent as well as provide more revenue to finance key government projects, especially in the areas of health, education and critical infrastructure.
Babington-Ashaye said: “The Finance Act has a lot of good things contained in it which is quite good for the economy.
“Take for instance, the issue of taxation; government uses taxation to motivate certain industries and also uses taxation as a basis for discouraging certain things.
“Now, the new tax provision is that companies with N25 million turnover need not pay tax; this is a good way to motivate SMEs to work harder for improvement on the national GDP.
”But, my worry is how faithful will the tax payers be? Because, we can have a situation where those people who have higher turnover will now divide it into two, in order not to pay tax at all.
“In order not to allow this to happen, government must ensure that those agencies in charge of tax collection, should monitor very closely these companies.
“Government agencies such as CAC and other tax officers must be diligent to whatever they are doing so that tax payers don’t cheat on government.”