• Fri. Jun 9th, 2023

    Fiscal reforms committee to correct errors in Finance Act 2020 with adjustment in 2021 Budget

    The Fiscal Policy Reforms Committee says it will take the opportunity to correct any perceived errors in the Finance Act 2020 if there is some fiscal enactment to adjust the 2021 Appropriation Act.
    Senior Special Assistant to the President on Finance and Fiscal Matters and Secretary of the committee, Bode Oyetunde, said this at the Finance Act 2020 virtual stakeholder engagement and consultation meeting on Tuesday.
    In the Finance Act 2020 approved by the government recently, the Federal Government introduced a 50 percent reduction in minimum tax rate from 0.5 percent to 0.25 percent, applicable for the Years of Assessment (YOA) from January 1 to December 31, 2020.
    The decision to reduce the tax rate, he said, was cushion the effect of COVID-19 pandemic on small and medium-scale businesses in the country.
    Mr 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. 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 as 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, the Director, Tax Policy and Advisory Department, FIRS, Sanya Gbonjubola said there would be no refunds of taxes already paid.
    “Sometimes, things are not what they appear to be, particularly when it comes to matters related to tax laws.
    “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 were some errors. 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,” Mr 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.” (NAN)

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