Federal Government of Nigeria proposes additional tax relief for Small Scale Businesses.

The Federal Government has proposed the exemption of small businesses from the payment of Tertiary Education Tax (TET), which is being collected by the Federal Inland Revenue Service (FIRS) in the new draft Finance Bill 2020.

This disclosure was made by the Chairman, Drafting Sub-committee and member of Fiscal Policy Reforms Committee, Mr Ajibola Olomola, at a virtual consultation and stakeholder engagement on Friday to discuss the economic and fiscal policy drivers underpinning the bill.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said the President had indicated in his 2021 executive budget presentation speech that the Finance Bill “is to support the realization of our 2021 revenue projections and that we will be adopting appropriate counter-cyclical fiscal policies that will enhance the efficiency of fiscal incentives.

According to a report, the Fiscal Policy Reforms Committee which is chaired by the Special Adviser to the President on Economic Matters, Dr. Adeyemi Dipeolu, pointed out that currently, all companies registered in Nigeria are required to pay TET at 2% of assessable profits for each year of assessment.

Mr Ajibola Olomola said the proposal for Finance Bill 2020, “is to introduce an amendment to the Tertiary Education Tax Act, to exempt small businesses from Tertiary Education Tax.’’

He said that this is part of the measures and incentives being introduced by the Federal Government to assist small businesses.

in addition, Olomola said, “The Finance Bill 2020 will include certain provisions that allow the tax authorities to deploy information technology for the collection of taxpayer information of tax and reduce the cost of collection.

“In light of this proposal, stringent rules are also proposed to secure taxpayer confidentiality from unauthorized access by third parties. The Finance Bill 2020 will look to introduce significant penalties for breach of data confidentiality by tax officials.”

This new proposal from the Federal Government comes at a time most businesses especially small enterprises are still battling with the devastating effect of the coronavirus pandemic. This is expected to help mitigate the impact of the VAT rate increase on small vulnerable businesses.