Value Added Tax (VAT) taxpayers, failing to meet their payment obligations within the stipulated window, will face the sanction of having the payable amount upped from the standard 7.5% to 10%, according to the proposition of the Finance Bill 2020, currently undergoing legislative scrutiny.
Senate Leader Yahaya Abdullahi said Wednesday the legislation sought modification to both the Capital Gains Act as well as the 2019 VAT Act.
Abdullahi noted that the 28thsection prescribed penalty for refusal to inform authorities of address change and cessation of business.
The Finance Bill, which President Muhammadu Buhari dispatched to the National Assembly this week, raised the sanction for this breach by 900% from N5,000 to N50,000 in the first month and N25,000 in subsequent months.
It introduced a new Section 8 of the VAT Act, which made provision for the registration of a taxable person once the person initiated a business person.
“The penalty for failure to register (a company) has been increased from N10,000 to N50,000 in the first month and from N 5,000 to N 25,000 in the subsequent months,” Abdullahi said.
“The new section 15 of VAT introduces a threshold for VAT compliance. Thus, companies with turnover of N25m or more shall render their tax on or before the 2lst of every month.”
He went further to say Section 36 (2) of the Capital Gains Tax Act was under review to scale up compensation for loss of office, currently fixed at N10,000 to N10 million.
“There is a new section 32 which provides that no tax shall apply to any trade or business transferred to a Nigerian company for the purposes of better organisation of that trade or business.
“This tax exemption is however not applicable if the acquiring company subsequently disposes of the assets within one year of acquiring same.”
The bill scaled second reading at the Senate on Wednesday and is planned as an auxiliary document to the 2021 Appropriation Bill also awaiting the National Assembly’s approval.
- Death toll from earthquake in Indonesia reaches 42 - January 16, 2021
- Passenger sues Dana Air, seeks N1bn in damages - January 16, 2021
- Trouble looms in Uganda as Bobi Wine claims election victory despite President Museveni’s early lead - January 16, 2021