COVID-19: Lawmakers Propose Duty Waivers, New Tax Regime
In a record time, the House of Representatives has passed the Emergency Economic Stimulus Bill, 2020, which, among other things, aims at providing temporary relief to companies and individuals from the economic consequences of the COVID-19 pandemic.
The bill especially seeks to maintain the general financial wellbeing of Nigerians pending the eradication of the pandemic and return to economic stability.
It was titled, ‘A Bill for an Act to Provide for Relief on Corporate Tax Liability, Suspension of Import Duty on Selected Goods and Deferral of Residential Mortgage Obligations to the Federal Mortgage Bank of Nigeria for Fixed Term to Protect Jobs and Alleviate the Financial Burden on Citizens in Response to the Economic Downturn Occasioned by the Outbreak of COVID–19 Disease.’
The bill, at the plenary on Tuesday, passed the first, second and third readings in just over one hour.
It was jointly sponsored by the leadership of the House, including the Speaker, Femi Gbajabiamila, and the Deputy Speaker, Ahmed Wase.
The Senate, which is required to concur with the legislation before onward transmission to the president for assent, had, however, adjourned for two weeks before the House concluded work on it.
In the bill, a copy of which our correspondent obtained, the lawmakers listed its objectives as including to provide temporary relief to companies and individuals, and to alleviate the adverse financial consequences of a slowdown in economic activities brought on by the outbreak of the COVID-19 disease in Nigeria.
It will also protect the employment of Nigerians who might otherwise become unemployed as a consequence of management decision to retrench personnel in response to the prevailing economic reality.
It will also provide for a moratorium on mortgage obligations for individuals at a time of widespread economic uncertainty.
Also, the legislation would “cater to the general financial wellbeing of Nigerians pending the eradication of this pandemic and a return to economic stability.”
Furthermore, the proposed law will provide a new tax regime for corporate bodies, with rebates to encourage companies in the country to maintain their payroll status for the immediate term.
Gbajabiamila, who led the debate on the bill, said, “This, we hope, will prevent large-scale job losses in an already fragile economy and allow our people to carry on with their lives as best as possible in the event of a large-scale outbreak of the sort we have witnessed in other parts of the world.”
The Speaker explained that the bill primarily sought to grant companies a rebate on Companies Income Tax to the value of 50 per cent of Pay As You Earn deductions, as long as such companies maintained their PAYE rolls as of March 1 to June 2020.
Gbajabiamila also said the suspension of import duties on medical and safety items would take effect from March to June, while the Minister of Health, Dr Osagie Ehanire, would by regulations publish in the gazette to specify such goods.
Gbajabiamila further explained that the proposal would defer obligations on residential mortgages obtained by individual contributors to the National Housing Fund for three months in the first instance.