Mr Realwan Okpanachi, a Constitutional lawyer in Abuja says the provisions of the 2020 Finance Bill signed into law by President Muhammadu Buhari on Jan. 13, is favourable to common Nigerians.
The 2020 Finance Bill, signed into law is aimed at reforming Nigeria’s tax system to align with global best practices to support Small and Medium Scale Enterprises.
Okpanachi said this in an interview with newsmen on Friday in Abuja.
“When you look at the salient provisions of the act, you will see that the businesses being run by the common people which we call Small and Medium Enterprises(SMEs) are now tax free,’’ he said.
“Nigerians, who are into small businesses and whatsoever they earn as profit up to less than N25million annual turnover, won’t be taxed.
“They will not pay tax and the money that they would have used in payment of tax shall now be reinvested into their businesses in order to grow them further.
“What this means is that businesses that are for the common people have been given the necessary protection and opportunity to grow,’’ Okpanachi said.
The lawyer said this had given owners of small businesses, the opportunity to come out and formalise their businesses by getting them registered to attract other incentives government had provided for them.
He noted that the bill equally favoured the middle class business people whose annual turnover was less than N100 million.
“However, between N25 million and N300million, their own tax burden has been reduced from 30 per cent to 20 per cent, as opposed to 30 per cent.
“And when you also look at things consumed by ordinary people like milk and other foods, including agricultural products all are exempted from vat.
“This means that people no longer pay vat on these products including sanitary pads that our women use everyday,’’ Okpanachi said.
The lawyer said government was very careful in ensuring that the tax bill reflected the reality of the ordinary people.
“That is why government ensures that salient provisions have been put in the bill to protect the vulnerable people,’’ he said.
He said that people might not appreciate what the government had done until after a year or two, when they would start seeing small businesses that had been struggling to pay taxes, suddenly spring up.
He said all the businesses that had been harassed because their taxes were building up, would start growing because the owners would had ploughed the money for tax back into their businesses.
“So, the bill should have been called the `People’s Bill` because it’s all about the people, the ordinary and vulnerable people.
“ When you look at it, the government is out to protect the interest of the ordinary people,’’ Okpanachi said.
He said that unlike before, no matter how low the business’s annual turnover was, one was expected to pay tax, “but now it is different’’.
“Even if you are earning up to N24 million as annual turnover, you no longer pay tax,’’ he said.
The lawyer said that government had demonstrated its concern for the vulnerable people through this finance bill and therefore deserved commendation.