What You Need to Know About COVID-19 Emergency Economy Stimulus Bill
WHAT YOU SHOULD KNOW ABOUT THE COVID-19 EMERGENCY ECONOMIC STIMULUS BILL, 2020 AS PASSED BY THE HOUSE OF REPRESENTATIVES TODAY
Grant companies a rebate on Companies Income Tax to the value of 50% of PAYE deductions so long as these companies maintain their PAYE rolls as at 1st March 2020 till 31st December 2020.
Suspend import duties on medicines, medical equipment, personal protective equipment and other such medical materials as may become essential to managing and eradicating an outbreak of Covid – 19 virus in Nigeria. The exemption takes effect from 1st March 2020 and remains in force till 31st December 2020.
The Minister of Health may by regulations published in the Gazette specify such goods that qualify under this section Defer mortgage obligations on residential mortgages obtained by individual contributors to the National Housing Fund for 180 days in the first instance.
Why are we doing this?
The emergence of the Covid – 19 pandemic has had a devastating effect on global economies. Millions of people all over the world have lost their livelihood, and others have witnessed the rapid depreciation of their retirement benefits through the wipeout of stock market values.
This Bill is how we try to 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.
Individual contributors to the National Housing Fund who have obtained Federal Mortgage Bank of Nigeria (FMBN) backed mortgages to purchase family homes will enjoy a moratorium on making mortgage payments till the end of the year.
We do not have a robust system of health insurance in this country. A largescale breakout will put a strain on family finances.
In a situation where the government cannot do direct cash transfers to those most in need, this ensures that we at least can keep from taking from those who might need it during these uncertain days.
All over the world, shortage of test kits, personal protection equipment, medicines and other such have contributed to the loss of life caused by this Pandemic. Many of the goods that will qualify for these exemptions are already VAT exempt. Further removing import duties prioritises these goods and will spur import activity.
The actual schedule of qualified goods will be determined by the Minister of Health so that only those emergency needs that can not be provided for locally will qualify.