Nigeria’s legislative arm passes economic stimulus plan

Nigeria assembly buildingThe House of Representatives, an arm of Nigeria’s National Assembly, has passed the Emergency Economic Stimulus Bill to boost Nigerian economy given the debilitating effect of COVID-19

The bill, which still have to be passed by the other arm the Senate, aims at providing temporary relief to companies and individuals affected by the slowdown in economic activities caused by the COVID-19. It was billed to protect the employment status of Nigerians who might otherwise become unemployed as a consequence of employees decision to retrench personnel in responsive to the low economic activity.

The bill is expected to provide a moratorium on mortgage obligations for individuals at a time of widespread economic uncertainty. Additionally, it seeks to eliminate additional fiscal bottleneck on the importation of medical equipment, medicines, personal protection equipment and other such medical necessities as may be required for the treatment and management of COVID-19 disease in Nigeria. It would equally carter for the general financial well-being of Nigerians, thus providing with a new regime of corporate tax rebates to encourage companies to maintain their payroll status for the immediate term.

The bill was sponsored by Femi Gbajabiamila, speaker of the House. According to Gbajabiamila, it would prevent large scale job losses in an already fragile economy and allow people to carry on with their lives as best as possible in the event of a large scale outbreak.

Gbajabiamila said that the bill primarily seeks to grant companies a rebate on Companies Income Tax to the value of 50 per cent of Pay As You Earn (PAYE) deductions so long as such companies maintain their PAYE rolls as from 1 March 2020 to June 2020.

Explaining further, he stated that the suspension of import duties on the items listed on the bill would take effect between March and June 2020, and that the bill would also defer mortgage obligations on residential mortgages obtained by individual contributors to the National Housing Fund for three months in the first instance.

He believed that the measures in the bill would help Nigeria to effectively manage the present crisis and emerge from it with the possibility of rebirth and renewal. “This bill will  keep as many people in their jobs by providing tax-based incentives for companies to keep people on the payroll for as long as possible even when faced with harsh commercial realities. As the benefits outlined in this bill are available only to incorporated entities, we expect that the bill will have a further long-term benefit of helping to expand the tax base by encouraging incorporation and compliance.”

 

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