FIRS, ICAN disagree over proposed tax holiday for new firms

‘FAAC disbursed N467.85b in August’
The Federal Inland Revenue Service (FIRS) and the Institute of Chartered Accountants of Nigeria (ICAN) have disagreed over a proposed 10-year tax holiday for new firms.

The bill, which is currently before the National Assembly is aimed at amending the Company Income Tax Act (CITA), to increase tax holiday from five to 10 years.

At a public hearing convened by the Senate Committee on Finance, the FIRS chairman, Babatunde Fowler, supported the current provision of five years.

But ICAN President, Isma’ila Zakari, canvassed a contrary opinion, adding that the incentive would encourage entrepreneurs and existing companies to expand their operations.

According to Section 34 (a) of the proposal: “A new company going into business where infrastructures such as electricity, water or tarred road are not provided by the government, shall be exempted from tax for the first ten years of its operation.”

The FIRS boss argued that giving further incentive to companies would lead to a loss of revenue to the nation’s coffers.

He said most investors hardly invest in areas where they can’t make profit within five years of investment.

The ICAN president, however, recommended that a variation of five or 10 years to a new or existing companies, depending on the infrastructure on ground.

Senate President Bukola Saraki said: “When the CITA bill is passed into law, economic activities would be generated through tax moratorium assured by this Bill.

“It would also pilot the much-canvassed employment opportunities for our qualified youths, as well as opening up the communities where these companies are sited.”

Meanwhile, the National Bureau of Statistics has disclosed that the Federation Account Allocation Committee (FAAC) disbursed N467.85bn to the three tiers of government in August 2017, from the revenue generated in July 2017.

In a statement in Abuja yesterday, the NBS said the amount comprised of N387.32bn from the Statutory Account and N80.53bn from Valued Added Tax (VAT).

The NBS added that no allocation was refunded to the Federal Government from the Nigerian National Petroleum Corporation (NNPC), and no amount was also shared from the Excess Petroleum Product Tax (PPT) Account. The bureau disclosed that the Federal Government received a total of N193.05bn from the N467.85bn shared.

It added that states received a total of N130.69bn, while local councils received N98.01bn. The sum of N31.59bn was shared among the oil producing states as 13 per cent derivation fund.