The Federal Government plans to re-introduce the 2012 corporate tax (exemption of profits) order granting companies that create employment opportunities tax rebates.
It is also to accelerate the construction of over 700 kilometres of roads and bridges under road infrastructure tax credit scheme.
Besides, the government intends to promote consumer-spending and speed up reforms to enhance ease of doing business in the country.
These are the highlights of a fiscal stimulus package by the Muhammadu Buhari administration to cushion the impact of COVID-19 pandemic on Nigerians.
Finance Minister, Zainab Ahmed, said the fiscal policy coordination will review sectors that are eligible for pioneer tax holiday incentives under Industrial Development (Income Tax Relief) Act. (“IDITRA”).
Ahmed said in a statement yesterday by her Special Adviser, Mr. Yunusa Abdullahi, that the reviews would also cover “ fiscal incentives under the national automobile policy; process and approvals of import duty exemption certificates; tax expenditure studies and evaluation of current suite of fiscal incentives.”
To get the buy-in of the legislature, the Finance Minister solicited the support and cooperation of Senators and House of Representatives members to meet the emerging national emergency posed by COVID-19 and oil price decline.
According to the finance minister, “the framework is to be complemented by a fiscal stimulus package to cushion the impact of the crisis on the most vulnerable individuals and communities, financed by concessional borrowings as well as fiscal policy reforms to rationalize tax expenditures.”
Other components of the framework are the implementation of the Finance Act, 2019 and the Finance Act 2020 and other key economic-related laws to institutionalize the reforms.
The Finance minister also raised the point about key issues and challenges in achieving sustainable, inclusive and diversified growth and development.
According to her, “the key issues and challenges, are fiscal dependencies on oil revenues (downside risks for oil production and international oil price volatility); prioritizing expenditure (especially investments in infrastructure and human capital against fiscal risks from subsidies); and managing inflationary pressures amid faltering growth.
Addressing the impact of external developments like COVID-19, oil price decline, global trade tensions, African Continental Free Trade Agreement, (AfCFTA), etc., Ahmed said there are key execution priorities.
These priorities she said include, “considered stimulation of economic activity to create jobs and increase household consumption; prioritizing investments in critical infrastructure and human capital development to unlock latent growth potential of Nigerians (especially our Youth).
Others are, “accelerating the recovery in Gross Domestic Product (GDP) growth and stemming inflationary pressures; raising revenues and resources to finance critical expenditure, service debt and meet other obligations; increasing oil and non-oil revenues to finance priority capital and recurrent expenditures; and enhancing fiscal consolidation to rebuild fiscal buffers and increase resilience against fiscal shocks.”
