The Finance Bill 2019 when signed into law will not fully take effect from January 1, 2020, Minister of Finance, Budget and National Planning, Zainab Ahmed, has said.
The minister said at the presentation of the details of the 2020 budget on Thursday in Abuja that the approved legislation by the National Assembly was expected to be sent to President Muhammadu Buhari for final assent before the end of the week
The bill is a draft legislation by the government to remove the deficiencies in primary tax legislation by amending obsolete and contentious laws.
The bill seeks to promote fiscal equity, align domestic laws with global best practices, support micro, small and medium-sized businesses, boost government revenue and investment/capital market through the introduction of incentives.
The minister said although efforts were being made to fast-track the release of the new law to further redefine government business, until that is done, the measures government is taking will remain just plans for now.
“We (government) are confident that within this week, the president will have the bill from the National Assembly. Normally he will ask various ministries to comment before he gives the final assent, before the government starts the work from January 2020,” she said.
“I am not saying the Finance Bill will take effect from January 1, because I have seen in the media reports that from January 1, 2020, people without TIN (tax identification number) will not be allowed to operate their accounts with the banks. It does not work like that.
“For the bill to come into effect, the Federal Inland Revenue Service (FIRS) will have to engage the commercial banks and work out a modality on how the new law will be implemented.
“Normally, there will be information that will be given to citizens, a reminder on how bank customers can get their TIN, which is a simple issue of visiting the FIRS website and register to get their TIN.
“There will be some time to be given for that process to be activated before any decision to stop the use of any account is taken,” the minister said.
No more 2019 capital releases
On capital releases, the minister said the government does not plan to carry out further capital releases in the 2019 budget, as the 2020 budget is expected to kick off immediately on January 1, 2020.
“The 2020 budget takes effect from January 1, 2020. The 2020 budget provides an opportunity for the country to implement the annual January-December budget cycle following the timely passage of the appropriation by the National Assembly.
“The Finance Bill will, alongside the Strategic Revenue Growth Initiative (SRGI) enable government’s quest to significantly improve our revenue collection towards achieving its goal of revenue to gross to domestic product ratio of 15 per cent,” Mrs Ahmed said.
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She said the government was able to release about N1.2 trillion, about 56.1 per cent of the total N2.4 trillion approved appropriation for capital projects in the 2019 Budget.
“We will not be making any more releases for capital projects. However, there are other appropriations that are at various stages of processing that will be completed,” she said.
The minister did not say how much was involved in the appropriations under process.
2020 budget details
In her presentation, the minister said of the total N10.59 trillion budget, about N8.42 trillion revenue is provided for, consisting of about N2.64 trillion from oil, N1.81 trillion from non-oil and N3.97 trillion from other sources.
The budget also consists of deficit of N2.175 trillion. About N2.465 trillion is going for capital expenditure, N4.94 trillion for recurrent expenditure, N2.45 trillion for debt service, N273 billion for debt sinking fund, N350 billion for special intervention and N560 billion for statutory transfers.
On revenue projections for the year, the minister said while oil revenue will account for about 31.3 per cent of the total outlay, signature bonus/renewals will contribute 11.2 per cent, independent revenue sources (10.1 per cent), company income tax (CIT) 10 per cent, Customs (7.3 per cent) and domestic recoveries/fines (2.8 per cent).
She also mentioned revenue from government-owned enterprises (6.6 per cent), stamp duties (5.5 per cent) Federal Government’s share of actual balance in special accounts (4.1 per cent), Federal Government share in special levy accounts (3.5 per cent), value-added tax (VAT) (3.5 per cent), share of dividend from the Nigeria LNG (1.5 per cent) and other revenue sources (2.6 per cent).