Fiscal reforms committee to correct errors in Finance Act 2020

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Fiscal reforms committee to correct errors in Finance Act 2020
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The Fiscal Policy Reforms Committee has said it would correct any perceived errors in the Finance Act 2020 if there is any fiscal enactment to adjust the 2021 Appropriation Act.

Senior Special Assistant to the President on Finance and Fiscal Matters and Secretary of the committee, Mr Bode Oyetunde said this at the Finance Act 2020 virtual stakeholder engagement and consultation meeting.

The Federal Government, in the Finance Act 2020, introduced a 50 per cent reduction in minimum tax rate. The reduction was from 0.5 per cent to 0.25 per cent, applicable for the Years of Assessment (YOA) from Jan. 1 to Dec. 31, 2020.

The move was aimed at reducing the effect of COVID-19 pandemic on businesses.

Oyetunde was responding to a question on the possibility of taxpayers to claim the excess payments on their 2019 accounts expected to have been filed with the Federal Inland Revenue Service (FIRS).

The payment would have been for companies with financial years ending between July 1, 2019 to June 30, 2020.

“There may be some fiscal enactment before the middle of the year to adjust the 2021 Appropriation Act and if so, the Fiscal Policy Reforms Committee will take the opportunity to correct any perceived errors in the Finance Act 2020.

“We use criminal law to back tax provisions and the constitution does not allow us to penalise people for crimes committed that are not crimes at the time they were performed,” he said.

Earlier in response to another question, Mr Sanya Gbonjubola, Director, Tax Policy and Advisory Department, FIRS, said there would be no refund.

“Sometimes, things are not what they appear to be, particularly when it comes to matters related to tax law.

“We need to understand how the tax system works. Let me just say right away that there will be no refund.

“The proponent of that clause was to give a relief for two years to taxpayers in view of what everyone is facing.

“In couching the law, there was some error. What has happened is that the language of the law has effectively reduced the two years to one year.

“It happens that tax laws are never made in retrospect and any provision you make in retrospect, whether against or for the taxpayer, is ab initio.

“So what has happened is the intended two years has shut down to one year,” Gbonjubola explained.

He, however, expressed optimism that the amendment would come, hopefully, when looking at the 2021 Finance Act, so that taxpayers can still enjoy that one year that was intended by the policy.”

 

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