Reps Propose Tax Relief for Loss-Making Companies

Legislators in Nigeria’s House of Representatives are moving to provide financial reprieve for companies experiencing economic hardship. The proposed bill would amend the Companies Income Tax Act to eliminate minimum tax requirements for businesses recording losses during assessment years.

Currently, Section 33 of the existing Act mandates that companies with no taxable profits must still pay a minimum tax of 0.5 percent on their gross turnover, excluding franked investment income. The new bill, sponsored by Oboku Oforji from Bayelsa, aims to eliminate this requirement for loss-making enterprises.

A Response to Economic Realities

Oforji emphasized the bill’s core objective during the debate, “This amendment primarily proposes an exemption for such categories of companies under the Companies Income Tax Act in each assessment year.” The proposed legislation responds directly to the challenging economic climate that has forced many companies into financial distress.

“The goal is to provide fairness to taxpayers and ensure continued economic growth,” Oforji explained, highlighting the bill’s potential to offer a lifeline to businesses struggling to stay afloat.

The bill received significant backing, with James Faleke, chairman of the House Committee on Finance, noting that it forms part of the broader tax reform initiatives proposed by President Bola Tinubu. During the plenary session, lawmakers unanimously supported the bill through a voice vote led by Speaker Tajudeen Abbas.

If passed into law, the amendment could provide crucial breathing room for companies facing economic challenges.