COVID-19: Tax relief for Nigerian companies that donated to relief fund

*The Federal Government grants 50 percent reduction in minimum tax; from 0.5 percent to 0.25 percent for gross turnover for financial years ending between January 1, 2020 and December 31, 2021, among others: Laolu Akande, Senior Special Assistant to President on Media & Publicity, Office of the Vice-President

Alexander Davis | ConsumerConnect

In appreciating the timely support of members of the Organised Private in the Nigerian economy during the Coronavirus (COVID-19) pandemic, the Federal Government has proposed to grant tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID).

Likewise, the government has proposed exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND) companies with less than N25 million turnover are eligible.

ConsumerConnect reports the government in the week presented the Finance Bill 2020, which the Federal Executive Council (FEC) approved to the National Economic Council (NEC) in the country.

The approved Finance Bill 2020 that was presented to the state governors is seeking to provide more tax incentives for Nigerian businesses and individuals.

Laolu Akande, Senior Special Assistant to the President on Media and Publicity, Office of the Vice-President, in a statement at the end of the virtual NEC meeting presided over by Vice-President Yemi Osinbajo, at the Presidential Villa, in Abuja, highlighted some of the proposed bill which is being sent to the National Assembly (NASS).

The statement said: “Reduction in duties on tractors from 35 to 10 percent, reduction in duties on motor vehicles for the transportation of goods from 35 to 10 percent, reduction of levy on motor vehicles for the transportation of persons (cars) from 35 percent to 5 percent.

“Exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND) ─companies with less than N25m turnover are eligible

“50 percent reduction in minimum tax; from 0.5 percent to 0.25 percent for gross turnover for financial years ending between January 1, 2020 and December 31, 2021.

Akande stated that “granting of tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID).

“Clarification that only compensation for loss of office up to N10million would be tax exempt. (Clarification that it is the employer’s obligation to account for tax on payments relating to compensation for loss of office.)

“Introduction of software acquisition as qualifying capital expenditure to improve the ease of doing business.”

According to the presidential aide, “Minister of State for Budget and National Planning, Clem Agba made presentation at the virtual NEC meeting for the month of November 2020.

“Prior to the Finance Act 2019, compensation paid to an employee for loss of office over and above N10, 000 was subject to capital gains tax. There were two notable issues with the provision.”

The Minister reported to council that the balance of Excess Crude Account (ECA) as of 17th November, 2020, was at $72,409,970.48, said he.

The statement further noted that the Stabilisation Account balance was N49, 151,181,622.35, while the Natural Resources Development Fund Account balance was N155, 530,778,234.58

The committee chaired by the Vice-President to engage with youths and other critical stakeholders in addressing the deeper roots of the #EndSARS protests which was formed at the last NEC presented its report.

The committee, mandated to engage the youths, religious and civil society organisations, and security agencies regarding the issues and recommend effective solutions towards strengthening national unity among others, is made up of governors drawn from the six geopolitical zones in the country.

They are Aminu Waziri Tambuwal, Sokoto State Governor representing North-West; Prof. Babagana Umara Zulum, Borno State Governor representing North-East; and Abubakar Sani Bello, Niger State Governor representing North-Central.

Others are Rotimi Akeredolu, Ondo State Governor representing South-West; Engr. Dave Umahi, Ebonyi State Governor representing South-East; and Dr. Ifeanyi Okowa, Delta State Governor, representing South-South.