FG okays finance bill, to cut import duty on buses, others

The Federal Government plans to reduce the import duties and levies being paid on buses, tractors and other vehicles used for mass transit as a way to cut the cost of transportation and reduce inflation rate in the country.

This is part of the package of the new finance bill approved by the Federal Executive Council on Wednesday.

Minister of Finance, Budget And National Planning, Zainab Ahmed, gave the indication while speaking with state house correspondents after the FEC meeting in Abuja, adding that bill would now be transmitted to the National Assembly for consideration and passage into law.

Ahmed said the bill was coming with some reforms that would improve the country’s tax laws and reduce some taxes especially for small businesses in addition to those already reduced in the 2019 finance bill.

She said, “These reforms will commence and will be closely followed by the cessation rules for small businesses as well as providing incentives for mass transit by reducing import duties and the levies for large tractors, buses and other vehicles. The reason for us is to reduce the cost of transportation, which is a major driver of inflation, especially food production.

“In the last finance bill, 2019, we reduced taxes from 30 per cent to 20 per cent for enterprises that have a turnover of between N25m and N100m.”

Ahmed also assured that there will be no increase in taxes, adding, “We also have 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 for. “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 realise more operating surpluses from these enterprises.”

The minister said, “In producing this bill, what we were 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.”