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Thursday, April 16, 2020 /11.00PM / Bukola Akinyele for WebTV / Header
Image Credit: @YomiOlugbenro
Speaking on the COVID-19 pandemic, Tax and other
Fiscal Stimulus Measures in Nigeria, Mr. Yomi Olugbenro, Partner and West
African Tax Leader, Deloitte Nigeria emphasised the need for a coordinated
policy framework in the country to ensure that policies align with addressing
prevailing socio-economic challenges.
In his opinion the Federal Government is taking on
tax at the national and sub-national levels in a modest manner. The Tax expert
said, the crises is in both health and medical emergency and the slowly
emerging major economic challenges the country will have to face.
He argued that at the medical level it was
important to resolve how to contain the health impact and the medical crises of
COVID-19 as the country attempts to protect as many lives as possible.
Olugbenro was optimistic that on the medical side,
Nigeria could deal with the pandemic and upgrade medical infrastructure in a
way to make sure that people can go back to work.
He noted that the announcement made so far about
taxes has centred on administrative measures that would help taxpayers manage
their compliance obligations during the period.
The accountant further explained that some of the
measures related to shifting deadlines for returns and payments of federal
taxes and that of a couple of sub-nationals, the Federal Inland Revenue
Service (FIRS) have come up to announce postponement of filing deadlines by 5
days.
The tax expert believed that to soften the
impact of the COVID-19 lockdown on corporations and individuals, one of the
measures would to ease the inconvenience of tax reporting would be to give time
extensions for filing and returns so that businesses could take two or
three months in planning their returns.
Olugbenro said that the Finance Act 2020 that
kicked in at the beginning of the year made provision for some measure of relief
for micro and small businesses ,the reliefs included tax exemptions and
tax reductions. He said, If all this were put together then some measure of
support for businesses were in place but a lot more needs to be done.
He said, the first phase of the crises
management strategy was to devote time and energy on the medical crises
and health challenges and then policy could move on to the other phase.
The Deloitte partner said that, the most
critical thing at this point was coordination of public policy and the
effective intervention by government in providing palliatives.
He insisted that a lot of
coordination would be required in order for the country to channel its
limited resources into the best productive uses. The accountant believed that
the country needed to strengthen current containment measures in dealing with
medical emergencies.
On his part Mr. Boason Omofaye, MD/CEO African
Frontier Reports shared his views on the recent World Economic Outlook Report
of the International Monetary Fund (IMF) and the Central Bank of Nigeria (CBN)
Governors statement on the interventionist monetary policy measures in 2020.
According to Omofaye, the 27-page CBN document has
shown that the central bank has tried to midwife a coordinated economic
approach to economic growth by both the private and public sector actors.
He explained that, the private sector had its
fears or apprehensions in dealing with the government but what was important
was that the CBN in helping the government to achieve it growth and fiscal
goals was brokering collaboration between both sectors.. He cited the
N15trillion target for an infrastructure company plc [Infraco] which was an
idea muted by the CBN for transport and infrastructural finance in Nigeria in
terms of logistics, to help manufacturers, small and medium enterprises
to get on and use the instruments of the capital market to help raise
N1.5trillion at first instance, to spur further future fund raise to develop
domestic infrastructure.
Omofaye noted that Nigeria's infrastructural
funding gap was huge. The idea was use the private sector to come in and build
credibility and integrity into the fund raise and management process.
Omofaye noted that whether the citizens of the
country like it or not the Nigerian government would continue to borrow to
build infrastructure but if the private sector would be allowed to
structure both debt and equity packages under Infraco Plc and the entity is
listed on the Nigeria Stock Exchange [NSE] and the FMDQOTC Exchange then a
market-determined and private-sectored nurtured infrastructural fund could be
of immense benefit in closing the country's existing infrastructural funding
gap.
The financial analyst noted that the country could
not do much with taxes now but beyond tax the finance act creates other
opportunities for easing the tax burden on citizens and the relief pre-dated
worries about a COVID-19 economy. Omofaye noted that the proposal to reverse
the existing value added tax (VAT) from 7.55 to 5% was not practical. He
admitted that the government would need to be more creative to support large,
medium , and small-scale corporate entities and individuals as a way to move
the economy forward after dealing with the COVID-19 challenge.
Speaking on the issue of internet use and ICT generally,
Omofaye said additional pressure on digital networks while everybody worked
from home could put severe pressure on existing communication infrastructure
and he called on the government to restructure the ICT architecture in Nigeria
in order to operate provide a robust framework for remote work life going
forward.
The financial analyst also noted that whether the
country got help from the International Monetary Fund[ IMF], World Bank, or
from the Islamic Development Bank (IsDB), it would still need to face internal
issues of economic structure and management. He insisted that the country needs
to develop and grow a home-grown domestic economic strategy and implementation
framework to develop the country's industrial base, grow its manufacturing
with an eye on productivity as the economy employs millions of more Nigerians.
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