March 27, 2020
On 25 March 2020, the House of Representatives (HoR) of the Federal Republic of Nigeria passed the Emergency Economic Stimulus Bill. Amongst other provisions, the Bill seeks to put measures in place to protect jobs and alleviate the financial burden on citizens in response to the economic downturn occasioned by the outbreak of the COVID-19 (Corona Virus) disease. The Bill now awaits passage by the Senate and Presidential assent before its provisions will become effective.
Following the outbreak of the COVID-19 pandemic across various countries including Nigeria, the HoR considered and passed the Emergency Economic Stimulus Bill in a bid to mitigate the adverse economic effects resulting from the outbreak of the pandemic in Nigeria.
Some specific provisions of the Bill are highlighted below:
1. Rate of Tax and Special Tax Rebate
2. Deferral of Payment of Mortgages under National Housing Fund
3. Import Duty Waivers on Medicines and Medical Goods
This Bill, if signed into law, will have significant impact on businesses and taxpayers as it seeks to compensate employers that do not lay-off employees during the period of the crisis by providing tax rebates. In addition, with its stipulated import duty exemptions, necessary medical equipment and facilities will be more easily shipped into the country and should become available at affordable costs. For the mortgage moratorium, individuals with residential mortgage obligations to the government will not be required to make any repayments during the approved period.
The passage of the Bill by the HoR, is aimed at providing relief to employers and individuals and minimising the negative effects on the Nigerian economy in the light of the global pandemic. It is therefore a step in the right direction and it is expected that the Senate will also quickly pass the Bill. In addition to this, it is hoped that Government will provide additional economic palliatives as has been done in other countries impacted by the outbreak. In doing this, it is important that Government engages stakeholders (taxpayers, consultants, employers, businesses, importers, tax authorities at the Federal and State levels etc.) to understand the areas of need in the economy and ensure that the objectives of any stimulus is achieved. This will also help to achieve synergy and efficiency in the implementation of the intended reliefs. We will continue to monitor developments with respect to the Bill and its further consideration.