You would recall that in August last year (2016), we sent out a poll, requesting for your opinions in response to the call for policy recommendations by the NTP review committee. The revised NTP which was completed in September 2016 was approved yesterday, 1 February 2016, by the Federal Executive Council (FEC).
The revised NTP has now been thoroughly simplified, re-written in a straightforward and easily understandable manner. Also, practical measures for implementing the Policy has been included. You can view/ download the full version here.
Specifically, the revised National Tax Policy document contains measures designed to:
- Address multiplicity of taxes and multiplicity of Revenue agencies
- Reduce income tax rates and compliance burden for Micro, Small and Medium Enterprises
- Improve Nigeria's ranking on the global ease of paying taxes index from the current position of 181 out of 189 economies to top 50 by the year 2020.
- Encourage diversification, expand the country's tax base and improve Tax to GDP ratio.
Secondly, the FEC, during its yesterday’s meeting, finalised plans to increase the rate of VAT on some luxury items- subject to the approval of the National Assembly. The proposed tax rate and the exact definition of luxury items were not made known, but the Minister of Finance, Kemi Adeosun, did cite example of champagne being taxed at 20% VAT rate in the UK.
In January 2015 though, the then minister of finance, Ngozi Okonjo-Iweala, promulgated ‘luxury tax’ on 'luxury goods' and the items that classified as ‘luxury goods’ for the purpose of this tax include; private jets, luxury cars, yachts, champagnes, wines and spirits, first class international flight tickets, residential buildings in Abuja costing N300 million and above.