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The Tax and VAT proclamations are to be amended this
year as the Ministry of Finance and Economic
Development (MoFED) wants to see some provisions
changed. Drafts of the two laws are among four,
along with Mining Tax and Financial Reporting
Proclamations, it is planning to send to the Council
of Ministers.
MoFED wrote a letter to
the Council of Ministers two weeks ago listing the
four proclamations as the ones it will draft and
table to the Council of Ministers. The details of
the amendments are not yet clear, according to
sources inside MoFED. However, the ministry is
looking for consultants to do a study and come up
with proposals for the three tax laws.
Some of the provisions of the income tax law have
been a bone of contention between the tax authority
and tax payers, of which tax dispute settlement is a
major issue.
It was raised during the first public-private
dialogue forum where many of the major tax payers
and senior officials of the tax authority, including
the director-general, attended in February, 2010.
The Review Committee appointed by the tax authority
and Appellate Commission accountable to the Ministry
of Justice (MoJ), where taxpayers can take their
disputes over tax decisions, after depositing half
of the amount in dispute with the latter, has raised
issues of impartiality for many tax payers.
The other area of disputation is the amount of VAT
(15pc) to be paid, which many would like to see
reduced. Some experts argue that the amount should
be reduced and the tax base broadened considering
the rate of inflation. However, authorities argue
that the VAT is the average for African countries
and have shown reluctance to discuss the issue at
various meetings held with tax payers last year. The
African average for VAT is 15pc, with Nigeria having
the lowest rate of five per cent, according to a tax
policy survey conducted in sub-Saharan Africa in
2009/10.
The ministry also wants to see some amendments on
the mining tax law that was passed in 1996.
The financial reporting bill, which is being drafted
and is under review by experts, is a new law the
finance ministry plans to table to the Council of
Ministers. It is aimed at making companies comply
with the international financial reporting and
auditing standards adopted by two international
professional organisations: the International
Accounting Standards Board and International Public
Sector Accounting Standards Board. |
