Indications emerged on Tuesday that the House of Representatives may reconvene to consider President Muhammadu Buhari’s request for downward review of the N10.59 trillion for the 2020 fiscal year, just as it passed the Emergency Economic Stimulus bill which seeks to cushion the effects of the coronavirus pandemic on the citizenry.
9JATraffic recalls that the Minister of Finance had last Wednesday announced Federal Government’s decision to cut the budget by N1.5 trillion to N9.9 trillion amidst slide in the crude oil price at the international market.
Hon. Gbajabiamila who stated this ahead of the debate on the Emergency Economic Stimulus bill 2020, explained that the proposed legislation which scaled through third reading was aimed at providing “relief on corporate tax liability, suspension of import duty on selected goods and deferral of residential mortgage obligations to the Federal Mortgage Bank of Nigeria for a fixed term to protect jobs and alleviate the financial burden on citizens in response to the economic downturn occasioned by the outbreak of COVID-19 disease and for related matters.”
The bill which seeks to commence as from March 1, 2020, is expected to be reviewed by June 30, 2020, as stipulated in Clause 12 of the bill.
Leading the debate, the Speaker said 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 at March 1, 2020, to June 2020.
The bill 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.
According to him, the bill also grants a six-month deferral for payments on mortgages obtained by individual contributors to the National Housing Fund (NHF), in addition to the suspension of all import duties on medicines, medical equipment and other essentials required to help in the treatment and management of Covid–19 disease.
Clause 1(c) provides for a moratorium on mortgage obligations for individuals at a time of widespread economic uncertainty; (d) 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 the Covid–19 Disease in Nigeria, to ease the burden of importation and financial burden, thereby fostering easier access and reduction in the price; and (e) To cater to the general financial wellbeing of Nigerians pending the eradication of this pandemic and a return to economic stability.
Clause 3 of the bill further provides that: “Notwithstanding the provision of any other law in force in Nigeria, any employer duly registered under Companies and Allied Matters Act (CAMA) Cap C20 LFN 2004, which maintains the same employee status without retrenching their staff as at 1st of March 2020 till the rest of the year ending 31st of December 2020 shall be entitled to 50 per cent income tax rebate on the total of the actual amount due or paid as Pay As You Earn (PAYE) Tax under the Personal Income Tax Act Cap C8 LFN 2004 (as amended).
Clause 4 of the bill also provides that: “The following circumstances shall not preclude the rebate to employers under this section: Where an employee dies of natural causes; (b) Where employee voluntary leaves the employment or has already indicated interest to leave the employment before 1st of March 2020; or (c) Where the employee breaches the Labour Act Cap L1 LFN 2004.”
Clause 5 of the bill further provides that: “Under this section, the following words shall be interpreted as: ‘Rebate’ shall mean 100 per cent refund of employer’s income tax which shall be 50 per cent of PAYE Tax due or paid on employees of such employer who maintain the same status of employees from 1st of March 2020 till 31st of December or such further period as the President may stipulate. ‘Employers’ shall mean and be interpreted to include entities registered both in Part A and Part B of CAMA”.
Clause 6 of the bill also stipulates that: “Section (3) of this Act does not apply to employers partly or wholly under the Petroleum Profit Tax Act Cap P13 LFN 2004.”
Part 4 which deals with Import Duty Waiver on Medicines and Medical Goods provides that: “Notwithstanding anything contained in any other Act, law or regulation in force in Nigeria, import duty waiver is hereby granted on medical equipment, medicines, personal protection equipment and other such medical necessities as may be required for the treatment and management of the Covid – 19 Disease in Nigeria.”
Clause 11 provides that the “Minister of Health may by regulations published in the Gazette specify such goods that qualify under this section.”
Clause 12 of the bill also stipulates that: “The import duty waiver under this section shall take effect from the 1st of March 2020 and shall remain in force until the 31st of December 2020, while Clause 13 empowers the President to exercise his powers under Section 13 (1) (a) of the Customs, Excise, Tariffs, etc., (Consolidated) Act to further extend this waiver.”
In his intervention, Chairman, House Committee on Finance, Hon. Abiodun Faleke stressed the need to reduce the cost of demurrage on imported goods at various ports, considering the ban imposed on movement across the country, while noting that the move will also help in reducing port congestion.
While opposing an amendment to exempt 25% of the price of all products under the bill, Hon. Gbajabiamila argued that such a move would hurt the economy, adding that the intendment of the bill was to provide succour for the ordinary citizen.
Clause 9 of the bill also provides that the President shall have the power to seek a further extension of the deferral for a period of not exceeding 180 days subject to the approval of the National Assembly.
In the same vein, the House commended the management of GTB over the establishment of the 100-capacity hospital.
After the passage of the bill through Second Reading, the House at the Committee of the Whole adopted the 14 clauses, with the optimism that the Senate would fast-track the passage of the bill and assented to by President Buhari with a sense of patriotism.
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