A bill seeking to exempt companies recording losses from
paying the minimum income tax has passed the second reading in the house of
representatives.
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.
Section 33 of the extant Act states that companies having no
taxable profits for the year shall pay a minimum tax.
Such tax shall be 0.5 percent levied on the gross turnover
of the company excluding franked investment income.
The proposed legislation seeks to introduce a new subsection
to the aformentioned section to exempt companies that record losses in the
“assessment year” from paying the minimum tax.
Leading the debate, Oforji said the objective of the
amendment 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.
James Faleke, chairman of the committee on finance,
supported the bill, saying the amendment is part of the tax reform bills
proposed by President Bola Tinubu.
Lawmakers voted in support of the bill when it was subjected
to a voice vote by Tajudeen Abbas, speaker of the house.
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