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Reps introduce, pass Economic Stimulus Bill to reduce effects coronavirus on economy

House-of-Reps

The House of Representatives on Tuesday introduced and passed for third reading a bill that seeks to provide a stimulus for the Nigerian economy given the novel coronavirus that has been ravaging countries across the world.

Titled “Emergency Economic Stimulus Bill, 2020”, the draft law aims at providing temporary relief to companies and individuals to alleviate the adverse financial consequences of a slowdown in economic activities caused by the Covid-19 disease.

Sponsored by the House Leadership led the Speaker, Femi Gbajabiamila and other Members the objectives of the Bill are:

“To provide temporary relief to companies and individuals to alleviate the adverse financial consequences of a slowdown in economic activities brought on by the outbreak of the Covid – 19 Disease in Nigeria.

“To protect the employment status of Nigerians who might otherwise become unemployed as a consequence of management decision to retrench personnel in response to the prevailing economic realities.

“To provide for a moratorium on mortgage obligations for individuals at a time of widespread economic uncertainty.

“To eliminate additional fiscal bottleneck on the importation of Medical Equipment, Medicines, Personal Protection Equipment and other such medical necessities as may be required for the treatment and management of the Covid – 19 Disease in Nigeria, to ease the burden of importation and financial burden, thereby fostering easier access and reduction in the price; and  “To cater to the general financial wellbeing of Nigerians pending the eradication of this pandemic and a return to economic stability.

The provisions of this Act shall apply throughout the Federal Republic of Nigeria”.

The Bill also provides that any employer duly registered under the Companies and Allied Matters Act

(CAMA) Cap C20 LFN 2004, which maintains the same employee status without retrenching their staff as at 1st of March 2020 till the rest of the year ending 31st of December 2020 shall be entitled to 50 per cent income tax rebate on the total of the actual amount due or paid as Pay As You Earn (PAYE) Tax under the Personal Income Tax Act Cap C8 LFN 2004 (as amended).

It further states that: “notwithstanding the provisions of National Housing Fund Act 2018 or anything contained in any other Act, law or regulation in force in Nigeria, all payment of mortgage obligations on residential mortgages obtained by individual contributors to the National Housing Fund are hereby deferred for a period of One Hundred and Eighty (180) days effective from the 1st of March 2020.

“The President shall have the power to seek a further extension of the deferral for a period not exceeding One Hundred and Eighty (180) days, subject to a majority vote by members of the National Assembly”.

Another provision of the Bill said: “Notwithstanding anything contained in any other Act, law or regulation

in force in Nigeria, import duty waiver is hereby granted on Medical Equipment, Medicines, Personal Protection Equipment and other such medical necessities as may be required for the treatment and management of the Covid -19 Disease in Nigeria.

“The Minister of Health may by regulations published in the Gazette specify such goods that qualify under this section. The import duty waiver under this section shall take effect from the 1st of March 2020 and shall remain in force until the 31st of December 2020. The President may exercise his powers under Section 13 (1) (a) of the Customs, Excise, Tariffs, etc., (Consolidated) Act to further extend this waiver”.

In a lead debate, the Speaker said the bill primarily seeks to grant companies a rebate on Companies Income Tax to the value of 50 per cent of Pay As You Earn (PAYE) deductions so long as such companies maintain their PAYE rolls as at March 1, 2020, to June 2020.

He stated that the suspension of import duties on the items listed would take effect between March and June, a period of three months and that the Minister of Health may by regulations publish in the gazette to specify such goods.

Gbajabiamila argued that the draft law would also defer mortgage obligations on residential mortgages obtained by individual contributors to the National Housing Fund for three months in the first instance.

He said the measures are temporary, which would help Nigeria to effectively manage the present crisis and emerge from it with the possibility of rebirth and renewal.

“This Bill is how we try to keep as many people in their jobs by providing tax-based incentives for companies to keep people on the payroll for as long as possible even when faced with harsh commercial realities.

“As the benefits outlined in this Bill are available only to incorporated entities, we expect that the Bill will have a further long term benefit of helping to expand the tax base by encouraging incorporation and compliance”, he added.

Owing  to the importance the House attached to the Bill, the lawmakers suspended their rules to allow the draft law to be introduced for first reading, debated under second reading and passed through third reading after the consideration of the report at the Committee of Whole.

Following its passage through third reading, the Bill is expected to be transmitted to the Senate for concurrence after which it would be forwarded to President Muhammadu Buhari for assent.