10th October 2007(Vanguard-Lagos)
The Federal Government may drastically cut Companies Income Tax as from the 2008 Fiscal Year, as part of a basket of tax incentives geared towards attracting more investors to Nigeria and voluntary compliance, expected to boost tax revenue in the country.
Part of the plan of the government would be a deliberate policy shift towards indirect taxation, in line with international best practices.
These were part of the new National Tax Policy draft which the Executive Chairman of the Federal Inland Revenue Service (FIRS) Ms. Ifueko Omoigui presented to the Minister of Finance, Dr. Shamsuddeen Usman, in Abuja, yesterday.
The new rate being proposed in the draft would see companies operating in the country paying 20 per cent as Income Tax, rather than the current standard rate of 30 per cent.
"*If Nigeria decides to lower its rates of income tax in order to attract investment into the country, it would be nearly impossible for countries like Kenya, South Africa or any of the ECOWAS countries to compete, in view of the fact that dependence on income taxes for these countries is much higher. It is therefore possible that Nigeria can achieve competitive advantage in its tax system through lower rates adjustment", the policy draft said*.
The draft crafted by a Technical Sub-Committee of the Presidential Committee on National Tax Policy, the focus would be to achieve the objective of creating a good business environment through the provision of massive infrastructure for both existing and potential foreign and local industries.
"In a short to medium term, where it may not be possible for the government to provide the quality of infrastructure on the scale needed, it should seek to achieve the objective by making good use of the tax system. This can be done by decreasing the burden of taxation on companies and enterprises", the draft said.
No comments:
Post a Comment