New Finance Act to encourage Ease of Doing Business

A busy street in Lagos (South-West Nigeria), Africa's largest city and economic capital.

The National Co-operative Financing Agency of Nigeria (CFAN) on Tuesday said that the new Finance Act would encourage Ease of Doing Business and proliferation of formal businesses in the country.

The Executive Secretary of CFAN, Mr Emmanuel Atama told news reporters in Abuja, Nigeria that the aspect of the Act which excluded small businesses with low profit margin from paying tax was commendable.

Atama said that this provision of the Act would encourage businesses to grow:

“It is a good thing that government is putting this as a law.

“Before now, people were afraid of running their businesses as corporate companies because they know that they will be taxed.

“Once it is clearly stated that some categories of companies will not pay tax, it is a good one and I think it is a good move to encourage Ease of Doing Business.

“It will also encourage people to do their businesses within the formal front-line.

“I also believe that when someone in the informal sector moves to set up a company and enjoys such a privilege, the person will not want to remain at that level of not paying tax.

“Once the person grows to the level of paying tax, it will not be a problem.’’

On increase in Value Added Tax (VAT) from 5 percent to 7.5 percent, Atama suggested that the money realized from the increase should be channelled to infrastructure development and security.

He, however, regretted that civil servants who were recently paid minimum wage would in turn be taxed from the wage.

President Muhammadu Buhari on Monday signed the Finance Bill into law.

The bill will reform the tax regime by amending the Petroleum Profit Tax Act (PPT), Custom Excise Tax Act, Company Income Tax Act (CITA), Personal Income Tax Act, Value Added Tax, Stamp Duties Tax Act and Capital Gains Act.

Amaka E. Nliam