The Buhari lead administration has drawn up a stimulus package to cushion the impact of the dreaded Corona Virus. But, he, however, omitted the middle class and the poor in the stimulus package.
Under the stimulus plan, the federal government will re-introduce the 2012 corporate tax (exemption of profits) order granting job-creation tax rebates for employers.
Also contained in the stimulus plan will be the acceleration of construction of over 700km of roads and bridges under road infrastructure tax credit scheme.
Others are promoting consumer-spending, fiscal strategies and policies; accelerating ease of doing business-related fiscal reforms.
These were contained in a statement by the Special Adviser to the Minister of Finance, Mr Yunusa Tanko Abdullahi.
The Finance Minister was quoted to have said that the fiscal policy coordination will review sectors that are eligible for pioneer tax holiday incentives under the Industrial Development (Income Tax Relief) Act. (“IDITRA”).
Other reviews to be made include: “review of fiscal incentives under the national automobile policy; review of process and approvals of import duty exemption certificates; tax expenditure studies and evaluation of current suite of fiscal incentives.”
The stimulus package is contained in the Nigerian proposed integrated policy framework.
To get the buy-in of the legislature, the Finance Minister solicited for the support and cooperation of the Senate and House of Representatives to meet the emerging national emergency posed by COVID-19 and the oil price decline.
According to the finance minister, “the framework is to be complemented by a fiscal stimulus package to cushion the impact of the crisis on the most vulnerable individuals and communities, financed by concessional borrowings as well as fiscal policy reforms to rationalize tax expenditures.”
Other components of the framework include implementing the Finance Act, 2019 and proposing a Finance Bill, 2020 and other key economic-related laws to institutionalize the reforms.”
The Finance Minister also raised the point about key issues and challenges in achieving sustainable, inclusive and diversified growth and development.
According to her, “the key issues and challenges, are fiscal dependencies on oil revenues (downside risks for oil production and international oil price volatility); prioritizing expenditure (especially investments in infrastructure and human capital against fiscal risks from subsidies); and managing inflationary pressures amid faltering growth.
Addressing the impact of external developments like COVID-19, oil price decline, global trade tensions, African Continental Free Trade Agreement, (AfCFTA) etc., Ahmed said there are key execution priorities.
These key execution priorities she said include, “considered stimulation of economic activity to create jobs and increase household consumption; prioritizing investments in critical infrastructure and human capital development to unlock latent growth potential of Nigerians (especially our Youth).
Others are, “accelerating the recovery in Gross Domestic Product (GDP) growth and stemming inflationary pressures; raising revenues and resources to finance critical expenditure, service debt and meet other obligations; increasing oil and non-oil revenues to finance priority capital and recurrent expenditures; and enhancing fiscal consolidation to rebuild fiscal buffers and increase resilience against fiscal shocks.”