Tax Law Amendments
The Federal Government will unveil a new tax regime, which will result in the reduction in income tax and an increase in VAT from five to ten per cent, in the third quarter of 2005.
The Federal Executive Council had also on February 23, 2005 okayed nine draft tax bills, which are currently before the National Assembly.
The nine tax bills are: Bill for an Act to establish the Federal Inland Revenue Service as an autonomous Service; Bill for an Act to amend the Personal Income Tax Act; Bill for Act to amend the Companies Income Tax Act and Bill for an Act to amend the Petroleum Profit Tax Act.
Others are: Bill for an Act to amend the Value Added Tax Act; Bill for an Act to amend the Education Tax Act; Bill for an Act to amend the National Automotive Council Act; Bill for an Act to amend the Customs and Excise Tariff Act, and Bill for an Act to amend the National Sugar Development Council Act.
Under the new tax structure, apart from the increase in VAT from five per cent to 10 per cent, the two per cent Education Tax and two per cent National Automotive Council levy will be abolished.
The tax structure will also result in about 50 per cent cut in some parts of the personal and companies' income taxes.
The FIRS Chairperson, Ms. Ifueko Omoigui, in a recent interview explained that the objective of the tax reforms was to broaden it and not necessarily to increase the tax burden.
NOTE: The bill was rejected by the House of Assembly