The Nigerian Economic Stimulus Bill 2020 - How Much Cash Would Your Business Get?

Proshare

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.

 

Related News - Nigeria Economy

1.       The Nigeria Emergency Stimulus Bill Passes Second Reading at House of Reps - For The Records

2.      Of Swans and Free Markets Capitalism - Lessons for Nigeria

3.      Hiccup in Trade Activities Ahead

4.      Can the Nigerian Economy Survive the Virus?

5.      Cash Injection Due for Struggling Institutions; FGN Promissory Notes Amounted to N968bn

6.      COVID-19: CBN to Inject N1trn Stimulus Across Critical Sectors of the Economy

7.      Nigeria's Economy Under Strain As Inflation Rate Rises

8.     Headline Inflation Increases By 12.20% YoY In February 2020; 0.07% Higher Than January 2020 Rate

9.      Global Shocks Alters Nigeria's Short Term Outlook - NOVA

10.  10.Facebook Collaborates with NCDC and WHO to Tackle Misinformation on Coronavirus

11.   Weekly Economic and Financial Commentary - Week Ended Mar 13, 2020

12.  FAAC Disburses N716.30bn in January 2020 - NBS

13.  13.Headline Inflation Rate to Increase to 12.37% in February 2020 from 12.13% Reported in January 2020

14.  CBN - Market Fundamentals Do Not Support Naira Devaluation at This Time

15.  COVID-19 and the Nigerian Economy: Backed to the Wall

16.  FAAC Disburses N2.93trn to FG in 2019 - NBS

17.   Nigerian Macroeconomic and Market Report - February 2020

18.  CBN Governor's Remarks at the "Going For Growth 2.0" Roundtable Session


Proshare Nigeria Pvt. Ltd.

 

Related News - Monetary Policy

1.       MPC - Think Twice or You Sink! FDC Aligns With TheAnalyst Opinion that the CBN is Trapped

2.      CBN Issues Guidelines for the Implementation of the N50bn Targeted Credit Facility

3.      CBN Communique No. 129 of the MPC Meeting - Mar 23-24, 2020

4.      The Limits of Heteredox Economics Revealed, MPC Trapped and Has to Hold

5.      Monetary Policy Preview - Caught Between the Devil and the Deep Blue Sea

6.      COVID-19: CBN, Bankers' Committee To Support Pharmaceutical Coys

7.       Bankers Committee Reviews Impact of COVID-19 On Economy, Announces Support Packages

8.      Coronanomics: Figuring Out CBN's Recent Policy Intervention

9.      CBN Policy Measures In Response to COVID-19 Outbreak and Spillovers

 

Proshare Nigeria Pvt. Ltd.


Related News - #Coronavirus

  1. COVID-19 Tax Measures - LIRS Extends Filing Deadline for Annual Returns
  2. COVID-19: AFREXIM Bank Rolls Out $3bn Facility To Support African Member States
  3. #Coronanomics: The Changing Scale of Edtech, Healthtech, and Virtual Work Space In Nigeria
  4. COVID-19: Cyber Risks, Insurance and Us
  5. COVID-19: Joint Statement by the FCA, FRC and PRA
  6. COVID-19: FirstBank Focussed on Solving Education Challenges Facing Parents
  7. Securities Regulators Coordinate Responses to COVID-19 through IOSCO
  8. CBN to Remain Operational While COVID-19 Lasts
  9. COVID-19: Ecobank Launches "StaySafeNigeria" Media Campaign
  10. 39% of APAC Corporates More Exposed to Coronavirus
  11. World Bank and IMF Issue Joint Statement to the G20 Concerning Debt Relief for the Poorest countries
  12. COVID-19: Dangote Rallies Private Sector Operators To Contain Pandemic In Nigeria
  13. COVID-19: Opportunities For The Nigerian Digital Economy - Dr. (Mrs) Omobola Johnson
  14. In It Together: Protecting the Health of Africa's People and their Economies
  15. The Nigeria Emergency Stimulus Bill Passes Second Reading at House of Reps - For The Records
  16. eTranzact International Plc Proposes Rights Issue of 4.67bn Shares
  17. COVID-19 and the New Work Culture: The Financial Implication for Individuals
  18. Anap Foundation COVID-19 Think Tank Presents 'Coronavirus Alert'
  19. CBN Issues Guidelines for the Implementation of the N50bn Targeted Credit Facility
  20. COVID-19: Measures Taken by UK Government to Support Business
  21. COVID-19 Pandemic and the Middle East and Central Asia: Region Facing Dual Shock
  22. COVID-19: CIBN Adjusts Programmes; Holds AGM Through Teleconferencing, Postpones April Exams
  23. FIRS Grants Tax Concessions in Response to COVID-19
  24. The Limits of Heteredox Economics Revealed, MPC Trapped and Has to Hold
  25. SEC Nigeria Issues Advisory On COVID-19
  26. Fiscal and Monetary Responses to COVID-19 Menace: Racing Against Time
  27. COVID-19: Access Bank, Ecobank Bank Leverage Online Channels
  28. Crude Oil: Unsold Cargoes Forces Price Slash
  29. COVID-19: NSE Extends Time to Submit Audited Financial Statement by Dealing Members
  30. COVID-19: Ventures Platform and Lagos State Government Partner in Fight Against
  31. Fragility of State Government Finances
  32. Philanthropic Efforts Towards COVID-19 Containment Globally
  33. Non-Essential Federal Public Servants to Stay and Work From Home to Check Spread of COVID-19
  34. COVID-19: NSE Activates 30-day Remote Work Plan; Remote Trading to Continue
  35. IsDB Supports OIC Countries With $730m To Combat COVID-19
  36. COVID-19: Presidential Task Force Issues Statement; FEC Meetings Suspended Until Further Notice
  37. Quiet Bond Market as COVID-19 Fears Creates Uncertainty Among Investors
  38. The Federal Reserves is Running Out of Options to Stave Off a Coronavirus Depression
  39. ACCESS Releases Update To Key Stakeholders on Coronavirus
  40. COVID-19: NSE Extends Time to File Audited Financial Statement for the Year Ended 31 December 2019
  41. Coronavirus: Oyo State Activates Emergency Operating Centres, Names Incident Manager
  42. COVID-19: Our Compliance with Lockdown and Measures Put in Place To Serve You
  43. COVID-19: CBN, Bankers' Committee To Support Pharmaceutical Coys
  44. Bankers Committee Reviews Impact of COVID-19 On Economy, Announces Support Packages
  45. WHO launches Health Alert service on WhatsApp
  46. Coronavirus Crisis Is Crushing Global GDP Growth
  47. Coronavirus: Firstbank Deploys Measures to Protect Employees, Customers and other Stakeholders
  48. Blunting the Impact and Hard Choices: Early Lessons from China
  49. COVID-19 Outbreak: How is Africa faring?
  50. COVID-19 Pandemic: Ecobank Encourages Customers to Adopt Digital Self-Service Solutions
  51. COVID-19 Pandemic and Latin America and the Caribbean: Time for Strong Policy Actions
  52. COVID-19: NSE Advises Companies to Put Adequate Precautionary Measures In Place Ahead of 2020 AGMs
  53. Can the Nigerian Economy Survive the Virus?
  54. What's Really Happening In Oil Markets?
  55. COVID-19: Lagos and Ogun States Ban High Density Social Gatherings
  56. Banks Bring Down Cost-to-income ratios As Industry Margins Tighten
  57. NCDC Releases Self Isolation Guidance for Nigerians
  58. COVID-19: CBN to Inject N1trn Stimulus Across Critical Sectors of the Economy
  59. Coronanomics: ICIEC Pledges $150m In Insurance Coverage For OIC Members
  60. Coronanomics: Figuring Out CBN's Recent Policy Intervention
  61. Oil Price Plunge to Pressure US Energy States and Locals
  62. Coronavirus to Weaken Sovereign Fiscal Positions; Track Record Matters
  63. FG Restricts Entry Into Nigeria from 13 Countries; Suspends Issuance of Visa on Arrival
  64. UK Foreign Office Issues Travel Advice Against Non-Essential Travel Worldwide
  65. Fed Actions, US Banks Discount Window Use Prudent Amid Turmoil
  66. CBN Policy Measures In Response to COVID-19 Outbreak and Spillovers
  67. Coronavirus Containment Actions Pose Material Risk to Global Structured Finance
  68. Federal Reserve Cut Rates to Support the Flow of Credit to Households and Businesses
  69. World Bank Group Increases COVID-19 Response to $14bn To Help Sustain Economies, Protect Jobs
  70. There Is No Systemic Risk - Feedback From Goldman Sachs' Conference Call Held Sunday
  71. Coronavirus Containment Actions Pose Material Risk to Global Structured Finance
  72. Africa CDC Policy Recommendation for AU Meetings and Travel During COVID-19 Outbreak
  73. Africa CDC Guidance on Community Social Distancing During COVID-19 Outbreak
  74. COVID-19 and the Nigerian Economy: Backed to the Wall
  75. Coronanomics: Inside Nigeria's Stock Market Response
  76. Coronavirus: IsDB President Calls For Coordinated Efforts To Tackle Pandemic
  77. Coronavirus: FG to Review Budget as Oil Price Plunges
  78. Potential Impact of the Coronavirus Epidemic: What We Know and What We Can Do
  79. World Bank Group Announces Up to $12bn Immediate Support for COVID-19 Country Response
  80. China's Official Manufacturing Index Crashed from 50.0 to a Record Low of 35.7 In February 2020
  81. FG Inter-Ministerial Meeting Reviews Strategies On Containing Coronavirus
  82. Arbitrary Increase in Prices of Protective and Hygiene Products on Account of Coronavirus Concerns
  83. Coronanomics: Understanding The Darker Side of A Virus's Economic Downside
  84. Coronavirus: Establishing The Nexus Between A Bug and Global Equity Markets
  85. WHO Director-General's Opening Remarks at the Media Briefing on COVID-19
  86. First Case Of Coronavirus Confirmed In Lagos
  87. COVID-19 Refinancing Risk Elevated for 6% of Rated China Corps
  88. Global Ports Vulnerable to Coronavirus-Related Volume Declines
  89. The First Innovative Corporate Bond Supporting Anti-Epidemic Is Given The Green Light To Issue
  90. Coronavirus May Add to Liquidity Strain for Some APAC Corporates
  91. Coronavirus Set to Dampen China's Economic Growth
  92. What Coronavirus Means for Investors
  93. Coronavirus Raises Risks for China Toll Road Operators
  94. Coronavirus Could Push Global Oil Market into Surplus
  95. Airlines Face Growing Pressure From The Coronavirus
  96. Coronavirus' Severity Will Frame Effect on Corps, Sovereigns
  97. China Government Suspend Equity Market Trading to Prevent Sell-Off

 

Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP