- FG to Implement New Finance Bill on Jan 2
The Federal Government will implement the new Finance Bill on January 2, 2020, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed has said.
Ahmed made the statement while speaking at the PwC Executive Session on Finance Bill and Tax Strategy.
The Federal Executive Council had approved the Finance Bill in order to increase Value Added Tax (VAT) from 5 percent to 7.5 percent and amend seven other business and finance laws.
The Minister said with the bill the federal government planned to up ratio of revenue to Gross Domestic Product from the current 6 percent to 15 percent by 2023.
She explained that the larger part of the 15 percent would be from the non-oil sector, adding that the bill would be reviewed annually.
According to her, the component of the bill may not favour businesses in the short term but in the long run, it would favour everyone and help economic stability.
She said, “The Nigerian economy is characterised by structural challenges that limit the country’s ability to sustain economic growth, create more jobs and achieve significant poverty reduction.
“One of the biggest challenges of all is our high dependence on oil for our economic activities, fiscal revenues and foreign exchange earnings.
“In 2016, Nigeria fell into recession due to its vulnerability to oil. Although the oil and gas sector accounted for just about 10 per cent of the GDP, it represented 94 per cent of export earnings and 62 per cent of government revenues (federal and state) in 2011-2015.
“This narrative is changing but we still have much more to do to get to our desired revenue to GDP ratio of 15 per cent by 2023, which we anticipate to come from non-oil revenues. We must grow our tax to GDP ratio from the current six per cent as of 2018.”
