BUSINESS NEWS

FG proposes tax incentives for companies that donated to Covid-19 relief fund

NEWSMAN, Abuja –  Federal Government, in the new 2020 Finance Bill which was approved by the Federal Executive Council, has proposed a tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition, CACOVID.

This follows the effort of government to provide more incentives and reduce the tax burden on Nigerian businesses and individuals in the face of a harsh economic environment caused by the devastating impact of the coronavirus pandemic.

This was contained in a statement from the presidency at the end of the virtual National Economic Council (NEC) meeting which was presided by the Vice President, Professor Yemi Osinbajo, at the Presidential Villa in Abuja.

The approved Finance Bill 2020 which was presented to the state governors at the NEC meeting has some of the following highlights in the bill which is being sent to the National Assembly for passage;

  • Reduction in duties on tractors from 35 to 10 per cent
  • Reduction in duties on motor vehicles for the transportation of goods from 35 to 10 per cent
  • Reduction of levy on motor vehicles for the transportation of persons (cars) from 35 per cent to 5 per cent
  • Exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND)-companies with less than N25m turnover are eligible • 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 1, 2020, and December 31, 2021
  • Granting of tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID)
  • 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.)
  • Introduction of software acquisition as qualifying capital expenditure to improve the ease of doing business

It should be noted that before the Finance Act 2019, compensation paid to an employee for loss of office over and above N10, 000 was subject to capital gains tax.

It was also pointed out that part of the decision which was reached at the meeting, was the setting up of a committee chaired by the Vice President to engage with youths and other critical stakeholders in addressing the deeper roots of the #EndSARs protests.

Other members of the committee are governors drawn from the 6 geopolitical zones across the country. They include 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, 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 has the mandate to engage the youth, religious organization, civil society, security agencies regarding the issues and recommend effective solutions towards strengthening national unity among others, Nairametrics reported.

The Coalition Against COVID-19 (CACOVID), which was launched on March 26, 2020, is a private sector-led organization in Nigeria established to assist the government in the fight against the coronavirus disease across the country.

This follows the announcement made by the Governor of the Central Bank of Nigeria, Godwin Emefiele. The purpose of the relief fund is to “support the efforts of the Federal government in containing the COVID-19 pandemic in Nigeria, ensure patients get the care they need and frontline workers get essential supplies and equipment and accelerate efforts to provide tests and treatments.

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