For the first time since it was enacted in 2007, the Public Procurement Act has been made mandatory for both the legislative and judicial arms of the Federal Government.
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This fact was made known, on Monday, by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, while giving a breakdown of aspects of the 2020 Finance Act, which became effective on January 1, 2021.
“Other key reforms in the Finance Act, 2020 include restrictions on the Cost-to-Revenue Ratios of Government and State-Owned Enterprises to increase operating surplus remittances; reforms extending the Public Procurement Act, for the first time, to cover the Judiciary and the National Assembly, as well as shortening procurement periods, increasing procurement mobilization fee thresholds from 15 per cent to up to 30 per cent, and providing for e-procurement.
Ahmed said Finance Act, 2020 was structured across five broad thematic areas of enacting counter-cyclical measures and crisis intervention initiatives; introducing broad-based tax and fiscal responsibility reforms; implementing key public procurement reforms; providing fiscal relief targeted at key sectors such as mass transit for mass transit, transportation and minimum wage earners; and ensuring closer coordination of monetary, fiscal and trade policies across ongoing Ease of Doing Business and other key reforms.
According to her, the Act has introduced 80 changes to about 14 different tax laws including the Company Income Tax Act, the Capital Gains Tax Act, Stamp Duties Act, Oil & Gas Export Free Zone Act, Customs & Excise Tariff Etc. (Consolidated) Act, Value Added Tax Act, amongst others.
“Some of the provisions of the Finance Act 2020 are consolidated on tax incentives in the Finance Act, 2019 which were targeted at stimulating micro, small and medium enterprises (MSMEs), given the role they play in employment generation and output growth.
“For instance, the Finance Act, 2020 extends the Corporate Income Tax exemption in the Finance Act, 2019 for Micro and Small enterprises with an annual turnover of N25 million or less to include exemption from paying Tertiary Education Tax.
“Also, Small or Medium Enterprises who are engaged in primary agricultural production may, on the application, be granted pioneer status (tax relief) for an initial period of 4 years and an additional two years (making a total of 6 years).”
The Act also exempted all low-income employees who earn the minimum wage or less from personal income tax; reduced minimum tax levied on companies from 0.5 per cent to 0.25 per cent of gross turnover less franked.
It further reduced import duty on tractors from 35 per cent to five per cent; mass transit vehicles for the transport of more than 10 persons and trucks from 35 per cent to 10 per cent, and the reduction of import levy on cars from 30 per cent to five per cent; while exempting commercial airline tickets, commercial aircraft spare parts, animal feed, rental or lease of agricultural equipment for agricultural purposes, amongst others from VAT.
She gave the assurance that government would judiciously utilize available resources to implement the 2021 budget to boost infrastructural development, restore growth, and improve the general economic wellbeing of Nigerians.
“I want to assure you that the Federal Government will continue to champion economic policies aimed at improving revenue generation, enhancing economic competitiveness, attracting foreign direct investments, encouraging domestic investors, and enhancing overall macroeconomic stability, despite the significant challenges posed by the COVID-19 pandemic.”
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