At an extraordinary virtual meeting today, the National Economic Council (NEC) received briefings on the proposed Finance Bill 2022 and resolved to update the draft with additional inputs from State Governors as the bill goes ahead to the Federal Executive Council.
The meeting which was presided over by Vice President Yemi Osinbajo, SAN, members of the Council were briefed on the main features of the bill by the Minister of Finance, Budget and National Planning, Hajia Zainab Shamsuna Ahmed.
According to the Minister, the proposed Finance Bill 2022 is anchored on five fundamental policy drivers:
Job Creation / Economic Growth;
Tax Incentives Reform;
Revenue Generation / Tax Administration
She added that the bill seeks to amend relevant taxes, excises and duty statutes in line with the macroeconomic policy reforms of the Federal Government and to amend and make further provisions in specific laws in connection with the public financial management of the Federation.
Other aspects of the Finance Bill include: Chargeable Assets; Exclusion of Losses and Replacement of Business Assets.
For instance under the Tax Equity pillar, all sectors of the economy would be brought into the tax net including Capital Gains Tax from digital assets, Cable Undertakings, Lottery and Gaming Business.
Similarly, under the Climate Change and Green Growth pillar of the bill, there would be incentives for the natural gas sector and discouragement of gas flaring.
Under the pillar of Tax Incentives’ Reforms, there would be new deductions for Research and Development, and Investment Tax Credits; Reconstruction Investment Allowance; Rural Investment Allowance; Incomes in Convertible Currencies to be exempt, among others.
Also, the bill contains an amendment under Chargeable Assets stating that, “subject to any exceptions provided by this Act, all forms of property shall be assets for the purposes of this Act, whether situated in Nigeria or not, including Options, debts, digital assets and incorporeal property generally.”
According to the bill, these provisions clarify the basis for the taxation of Cryptocurrency and other Digital Assets in line with the Government’s policy thrust of enhancing the cross-border and international taxation of growing e-commerce with emerging markets. By doing so, Nigeria will join the league of jurisdictions currently taxing digital assets, including the United Kingdom, the United States of America, Australia, India, Kenya and South Africa.
The Minister further noted that extensive consultations have been done on aspects of the bill such as tax avoidance and tax evasion by introducing a general anti-avoidance route.
She disclosed that in coming up with the bill, the Ministry of Finance engaged a wide range of stakeholders and elicited enough feedback especially through the work of a technical committee co-chaired by Special Adviser on Economic Matters to the President, Dr. Adeyemi Dipeolu and Special Adviser on Finance, Mrs. Sarah Alade.
Several Governors commented on the presentation of the bill, including the Governors of Sokoto, Borno, Kaduna, Kebbi, Ogun among others. It was then resolved that State Governors should make additional inputs just as the proposed bill is being sent forward for consideration to the Federal Executive Council before the President sends it to the National Assembly.
At the meeting, the newly sworn-in Osun State Governor, Senator Ademola Adeleke, was also formally welcomed to the Council by the Vice President and other members.
NEC, which is chaired by the Vice President, comprises 36 governors and the Central Bank Governor. The Council meetings are also attended by some members of the Federal Executive Council.