Thursday,
March 26, 2020 /05:32 PM / By Balogun Harold / Header
Image Credit: @HouseNGR
According to a CNN report, the economic stimulus
package proposed by the United States, contemplates a total of, $250 billion
set aside for direct payments to individuals and families, $350 billion in
small business loans, $250 billion in unemployment insurance benefits and $500
billion in loans for distressed companies. Nigeria's House of Representatives
also recently passed the Economic Stimulus Bill 2020, (the Bill) sponsored by
the Speaker of the Federal House of Representatives, Honourable Femi
Gbajabiamila.
Whilst we commend the sponsors of the Bill for
taking the initiative and responding swiftly, It is our considered view that
the wording and scope of the Bill does not provide the level of comfort that Employers
of Labour in Nigeria require at this time. Here are the key details of the Bill
, in short form.
Related Link: The
Nigeria Emergency Stimulus Bill Passes Second Reading at House of Reps - For
The Records
1.Incentives to Employers of Labour in
Nigeria
It is proposed that Employers of labour in Nigeria
be entitled to 50% income tax rebate on the total of the actual amount due or
paid as Pay As You Earn (Tax) under the Personal Income Tax Act. (the Tax
Rebate). To qualify for the Tax Rebate, a Nigerian Employer of Labour must be
able to demonstrate that
(a) It has maintained the same employee status that
it had before the outbreak of the Corona Virus and has not retrenched or
terminated the employment of its staff between March 1st 2020 and December 31,
2020 (Rebate Period)
(b) That it is not "wholly or partly" subject to
the provisions of the extant Petroleum Profits Tax Act (PPTA). The PPTA is
ordinarily applicable to oil and gas companies operating in Nigeria. The point
to be made here is that, as proposed, the Tax Rebate will not apply to oil and
gas companies operating in Nigeria.
(c) Its employees who left their jobs during the
Rebate Period either died of natural causes, voluntarily resigned their
appointment, had expressed a desire to resign their employment before March 1,
2020 or are in breach of the provisions of the Labour Act, applicable in
Nigeria.
It is further proposed that the President should
have the power to extend the Rebate Period, for the pendency of the Corona
Virus outbreak, where the President considers such extension necessary.
However, the exercise of this power is subject to the approval of the "majority
of the members of the National Assembly".
It's important to note that there is no mandatory
prohibition of employment termination during the pendency of the Corona Virus
outbreak. Employers of labour only need to choose between terminating the
employment of employees (assuming this becomes necessary) and the proposed Tax
Rebate.
2. Incentives to Importers
It is proposed that importers of "medical
equipment, medicines, personal protection equipment and other such medical
necessities as may be required for the treatment and management of Covid-I9
Disease in Nigeria", be excused from paying any import duty on the foregoing
items.
3. Temporary Suspension of Mortgage
Obligations to the Federal Mortgage Bank
It is proposed that all payment of mortgage
obligations on residential mortgages obtained by individual contributors to the
National Housing Fund be deferred for a period of 180 days from March 1, 2020.
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