President Muhammadu Buhari signed the 2020 Finance Act on December 31, 2020. The administration has perfected ways to borrow funds from unclaimed dividends and dormant bank account balances unattended for at least six years.
The idea of converting such private wealth to federal wealth negates the relevant provisions of the rights to own property as guaranteed by the 1999 Constitution. This move is unnecessary because capital market regulators and operators had leveraged technology to put in place initiatives that are already addressing the issue.
Indeed many shareholders have opposed the provisions of the law, saying the government lacks powers to manage funds belonging to private sector investors.
Nigeria, since 2015 had perpetually grappled with the twin problems of heavy budget deficits and weak balance of payments position. What is the guarantee that the incoming administration and the subsequent ones will have the capacity to repay Nigeria’s debt that has reached a scary level.
I however, welcome some amendments of the financial act that will help small companies (businesses with gross turnover of N25 million or less) who have been exempted from payment of tertiary education tax.
There is also a tax holiday for small and medium-sized companies engaged in primary agricultural production (crop, livestock, forestry and fisheries). This will help to boost small business.
There is also a provision which says individuals earning minimum wage or less will no longer pay personal income tax. Similarly, it has scrapped stamp duty on bank transfers. It however imposed an electronic money transfer levy of N50 on electronic receipts or transfer of money in the sum of N10,000 and above deposited in any bank or financial institution. The levy is to be paid by the receiver.
Section 38 has reduced levy to be paid on imported cars from 35 per cent to 5 per cent while import duty of tractors has been slashed.
Abba Dukawa writes from Kano State