Abuja, Nigeria
A bill introduced in the House of Representatives seeking to grant tax holidays to companies recording losses has passed the second reading.
The bill aims to amend the Companies Income Tax Act to “provide adequate security and guarantee” for businesses and companies that record losses in each “assessment year”.
The bill, which is sponsored by Oboku Oforji from Bayelsa, scaled through the second reading during plenary on Thursday.
The Company Income Tax Act, Section 33 grants companies having no taxable profits for the year the opportunity to pay a minimum tax for the period.
According to the Act, 0.5 percent is levied on the gross turnover of the company excluding franked investment income.
However, the bill proposes an amendment—-to introduce a new subsection which will exempt companies that record losses in the year of assessment from paying the minimum tax.
Speaking on the bill, Oforji said the proposed legislation is to provide fairness to taxpayers to ensure continued economic growth, especially in the wake of the economic realities that have resulted in a lot of companies recording losses and having to pay minimum tax despite the losses incurred.
“This amendment primarily proposes an exemption for such categories of companies under the Companies Income Tax Act in each assessment year,” he said.
Chairman of the finance committee at the lower chamber, James Faleke rose in support of the bill.
According to him, the amendment is part of the tax reform bills proposed by President Bola Tinubu.
The House members voted in support of the bill when it was subjected to a voice vote by the speaker, Tajudeen Abbas.
