The Federal Government in the 2020 Finance Bill presented to the National Economic Council on Thursday, proposed a range of initiatives aimed at cushioning the effect of COVID-19 on businesess.
The proposed legislation slashed import duties and levies, reduced minimum tax and exempted small businesses from TETFUND.
It also raised the compensation exemption threshold, qualifies software acquisition for capital allowance.
Read part of the statement released by Laolu Akande, spokesperson for the Vice President, Prof Yemi Osibanjo below.
“Following Wednesday’s approval by the Federal Executive Council (FEC), the 2020 Finance Bill that seeks to provide more tax incentives for Nigerian businesses and individuals has been formally presented to State governors under the aegis of the National Economic Council (NEC), at a meeting presided over today by Vice President Yemi Osinbajo, SAN.
“Some highlights of the proposed bill which is now headed to the National Assembly include:
“1. Reduction in duties on tractors from 35 to 10 per cent
“2. Reduction in duties on motor vehicles for the transportation of goods from 35 to 10 per cent.
“3. Reduction of levy on motor vehicles for the transportation of persons (cars) from 35 per cent to 5 per cent.
“4. Exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND)-companies with less than N25m turnover are eligible
“5. 50 per cent reduction in minimum tax; from 0.5 per cent to 0.25 per cent for gross turnover for financial years ending between January 1st, 2020 and December 31st, 2021.
“6. Granting of tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID).
“7. Clarification that only compensation for loss of office up to N10million would be tax-exempt. (Clarification that it is the employer’s obligation to account for tax on payments relating to compensation for loss of office.)
“8. Introduction of software acquisition as qualifying capital expenditure to improve the ease of doing business.
“Minister of State for Budget and National Planning, Mr Clem Agba made the presentation at the virtual NEC meeting for the month of November 2020.
“Prior to the Finance Act 2019, compensation paid to an employee for loss of office over and above N10, 000 was subject to capital gains tax. There were two notable issues with the provision:
*OTHER HIGHLIGHTS OF TODAY’S NEC MEETING INCLUDE:*
*FINANCIAL UPDATES BY MINISTER OF STATE*
The Minister reported to council that the balances in the under listed accounts are as follows:
Excess Crude Account (ECA) balance as at 17th November 2020 stands at $72,409,970.48
Stabilization Account balance as at 17th November 2020 stands at N49, 151,181,622.35
Natural Resources Development Fund Account balance as at 17th November 2022 stands at N155, 530,778,234.58
*PRESENTATION ON NEC AD-HOC COMMITTEE ON PUBLIC ENGAGEMENT BY THE COUNCIL CHAIR*
A committee chaired by the Vice President for NEC to engage with youths and other critical stakeholders in addressing the deeper roots of the ENDSARs protests was formed at the last meeting of NEC.
Members of the Committee are governors drawn from the 6 geopolitical zones in the country. They are, Aminu Waziri Tambuwal, Sokoto State Governor representing northwest; Prof. Babagana Umara Zulum, Borno State Governor representing northeast; Abubakar Sani Bello, Niger State Governor representing northcentral; Rotimi Akeredolu, SAN, Ondo State Governor representing southwest; Engr. Dave Umahi, Ebonyi State Governor representing southeast; and Dr Ifeanyi Okowa, Delta State Governor representing south-south.
• The Committee is to engage the youth, religious organization, civil society, security agencies regarding the issues and recommend effective solutions towards strengthening national unity among others
In today’s presentation, the Chair updated the Council that the Committee resolved as follows:
• There should be two broad levels of engagement, one with state and the second with zonal levels.
• All Governors should commence engagement within a week.
• Guidelines of engagement process should be developed.
• Engagement to include meetings with the youths and community leaders etc.
• The focus to be on young people.
• Engagement process to be flexible taking into consideration the peculiarities of individual states.
• The VP office to develop and forward engagement guidelines.
• Zonal engagement to commence on the 14th of November.
• The Zonal meetings to be attended by committee members including the governors.
• Governors to identify the various groups to be invited to the meetings
Resolution: Council resolved that the planned Zonal Engagements should proceed with the focus on Youths and Civil Society Organisations dealing especially with issues or jobs, and employment.
Similarly, the States level interactions should proceed in places where this has not been reported.
*CURRENT TREND IN FOOD PRICES AND THE NEED FOR URGENT REMEDIAL MEASURES BY THE SENIOR SPECIAL ASSISTANT TO THE PRESIDENT ON AGRICULTURE DR. ANDREW KWASARI*
Council received the presentation on the above subject matter with current food price situation analysis showing that:
• Food prices have changed between September and November involving commodities in Lagos and a few randomly selected states.
• The Hike in prices is due to the following factors
1. Delay in going out to the farm, which translates to delay in harvesting courtesy of COVID19 pandemic
2. EndSARS protest stalled food transportation and delivery and in some instances destroyed food stores
3. Banditry in the northwest effectively preventing farmers from harvesting fields cultivated
4. Farmers/herders conflict destroyed farm produce in some states
5. Increased cost of transportation
Resolution: States and FG were urged to adopt urgent measures including social protection schemes to deal with the situation. The FG will also pursue the implementation of its ESP -Agric plan and others to positively improve the situation in the sector.