To cushion the effects of the coronavirus on Nigerians, the House of Representatives has introduced and passed a bill to provide stimulus for the economy.
The bill which passed third reading yesterday, and titled: “The Emergency Economic Stimulus Bill, 2020,” was sponsored by the speaker, Hon. Femi Gbajabiamila, the deputy speaker, Ahmed Idris Wase, and other principal officers of the Lower House.
The bill aims at providing temporary relief to corporations and individuals to alleviate the adverse financial consequences of a slowdown in economic activities caused by the Covid-19 disease.
It also seeks to protect the employment status of Nigerians who might become unemployed as a consequence of management decision to retrench personnel in response to the prevailing economic realities.
Due to the urgency and importance of the proposed law, the House suspended its rules to allow for the introduction of the bill, its second reading and passed through third reading after the consideration of the report at the Committee of Whole.
The bill also provides for a moratorium on mortgage obligations for individuals at a time of widespread economic uncertainty.
It further seeks 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 Covid-19 disease in Nigeria.
It would equally carter for the general financial well-being of Nigerians pending the eradication of the pandemic and a return to economic stability.
The Emergency Economic Stimulus Bill will provide a new regime of corporate tax rebates to encourage companies in the country to maintain their payroll status for the immediate term.
Debating the bill, Gbajabiamila said, “This, we hope, will prevent large scale job losses in an already fragile economy and allow our people to carry on with their lives as best as possible in the event of a large scale outbreak of the sort we have witnessed in other parts of the world.”
He 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 informed 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.
The speaker also noted 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.
According to him, 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 said.
He further noted that Nigeria does not have a robust system of health insurance, adding that a large scale coronavirus breakout will put a strain on family finances, hence the need for a moratorium on making mortgage payments.
“All over the world, shortage of test kits, personal protection equipment, medicines and other such has contributed to the loss of lives caused by this pandemic.
“Many of the goods that will qualify for these exemptions are already VAT exempt further removing import duties prioritises these goods and will spur import activity,” he said.
The Bill will be transmitted to the Senate for concurrence following which it would be forwarded to President Muhammadu Buhari for his assent.
