Nigeria Senate

By Henry Umoru

THE Senate, on Wednesday, suspended its standing Order to fast-track the amendment of Finance Act, 2019 and other relevant tax statutes as presented by President Muhammadu Buhari.

This is barely twenty-four hours after the Senate received a  request for the amendment which was made by President Muhammadu Buhari.

Consequently, A Bill for an Act to Amend the finance Act, 2019 and other relevant tax statutes to provide clarifications regarding the tax Agricultural production, the administrative effective date for the commencement of the increase in Value Added Tax to 7.5 per cent and certain Basic items ex3mpt from Value Added Tax and for Other connected matters, 2020( SB.397) and sponsored by the Senate Leader, Senator Yahaya Abdullahi, APC, Kebbi North.

The Bill scaled second reading, just as there was no lead debate as a parliamentary procedure for the consideration of a Bill in the Senate.

President Buhari’s letter seeking for amendment of the 2019 Finance Act to formally give it a legal framework that the implementation date for the increase of Value Added Tax, VAT  from five per cent to 7.5 per cent is 1st of February 2020 was read on the floor of the Senate on Tuesday.

The Finance Act 2020 (Amendment) Bill, 2020(SB.397) was introduced today and read the first time as a new bill, but in order for it to be read the second time, the Senate Leader, Senator Yahaya Abdullahi, All Progressives Congress, APC, Kebbi North moved that the rules of the Senate be suspended.

According to him, Order 79 of the Senate Standing Orders as Amended be adhered to push the Bill and to allow it not to follow the tradition of allowing a Bill to through the first reading, then another Legislative day for second reading and another day for Public hearing.

Order 79 (1) of the Senate Standing Orders reads, “Every bill shall receive three readings previous to its passage, which readings shall be indifferent days unless the Senate unanimously directs otherwise and the President of the Senate shall give notice at each reading whether it is first, second or third.”

At the end of the day, President of the Senate, Senator Ahmad Lawan called for a voice vote and was taken that the Order is suspended.

Recall that President Buhari had written the Senate, seeking for amendment of the 2019 Finance Act to formally give it a legal framework that the implementation date for the increase of Value Added Tax, VAT  from 5% to 7.5% is 1st of February 2020.

In the letter dated 6th March 2020, received 10th March 2020  and addressed to the President of the Senate, Senator Ahmad Lawan, President Buhari sought for an Amendment of the Finance Act to exempt Animal Feeds as part of basic food items from the Value Added Tax, VAT.

According to the letter read by the President of the Senate during plenary, that Animal Feeds be included in the list of Basic Food items that are exempted from Value Added Tax forms part of the tax holiday incentive for agriculture, by targeting this incentive to small and medium-sized companies that invest in a primary crop, livestock, forestry and fishing agricultural production.

The President said that the incentive would also to be administered by the Nigerian Investment Promotion Commission pursuant to the Industrial Development (Income Tax Relief) Act.

Buhari’s letter read, “Pursuant to Sections 58 and 59 of Constitution of the Federal Republic of Nigeria1999 (as amended), I formally request that the Finance Act, 2019 (Amendment) Bill, be considered by the Senate, for passage into law.

“This bill seeks to amend the Finance Act, 2019, as recently passed by the National Assembly, by Clarifying:

“That the administrative effective date for the increase in Value Added Tax from 5% to 7.5% is the 1st of February 2020;

“That animal feeds are included in the list of basic food items that are exempted from Value Added Tax; and Aspects of the tax holiday incentive for agriculture, by targeting this incentive to small and medium-sized companies that invest in a primary crop, livestock, forestry and fishing agricultural production. This incentive is also to be administered by the Nigerian Investment Promotion Commission pursuant to the Industrial Development (Income Tax Relief) Act.

“While I trust that this Bil will be favourably considered for passage into law by the National Assembly so as to support the implementation of the 2020 Federal Budget. Please accept,

Distinguished Senate President, the assurances of my highest consideration.”

Vanguard