The House of Representatives is set to deliberate on a bill seeking to exempt loss-making companies from paying the mandatory minimum tax.
The proposed legislation, titled “A Bill for an Act to Amend the Companies Income Tax Act,” aims to modify Section 33 of the Act to exempt companies recording losses from the minimum tax requirement.
This tax currently applies to firms with no taxable profits or whose assessed taxes fall below the minimum threshold, except for start-ups within four years of establishment, primary agriculture businesses, or small companies.
Sponsored by Oboku Oforji, representing Bayelsa’s Yenagoa/Kolokuma/Opokuma Constituency, the bill aims to support struggling businesses by ensuring fair taxation.
According to Oforji, the amendment would “provide fairness to taxpayers and ensure continued economic growth amid tough economic realities.”
If passed, the bill would adjust the minimum tax rate, presently set at 0.5% of gross turnover (excluding franked investment income), which is payable even when companies incur losses.
The bill’s proponents believe this amendment will provide relief for businesses facing financial hardships, fostering a more competitive economic environment.
Many companies have shut down in recent years due to high operational costs, including diesel expenses and unreliable power supply.
Stakeholders are expected to support the bill given its potential to encourage business survival and growth amid Nigeria’s challenging economic landscape.
