Any company that does not lay off its staff till the end of the year would have the federal government refund 50 per cent of the income tax paid on its employees’ salaries, a bill passed by the House of Representatives on Tuesday says.
As COVID-19 disease ravages the land, with a looming possibility of workers being laid off, the bill seeks to grant companies a reduction on Companies Income Tax to 50 per cent of PAYE (pay as you earn), so long the companies do not retrench their staff.
Although it would be a temporary palliative, the bill seeks to grant a six-month deferral for payments on mortgages obtained by individual contributors to the National Housing Fund (NHF).
Likewise, it seeks to suspend all import duties on medicines, medical equipment and other essentials, to be determined by the minister of health, required to help in the treatment and management of COVID-19 disease.
Titled the “Emergency Economic Stimulus Bill 2020,” these exemptions are expected to take effect from March 1, 2020, and remain in force till 31st December 2020, with a clause of extension, if need be.
The bill was sponsored by all the House’s principal officers.
House Speaker Femi Gbajabiamila, who presented the bill, said the potential law are “temporary measures that we hope will help our country to more effectively manage this present crisis and emerge from it with the possibility of rebirth and renewal.”
He added: “This, we hope will prevent large scale job losses in an already fragile economy and allow our people to carry on 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.”
The much dreaded COVID-19 pandemic has stung the Nigerian economy badly, as it has plunged the global economy, locked down countries and killed thousands.
Nigeria’s 2020 budget, owing to a sharp drop in oil price, the nation’s lifeblood, has been negatively affected by current realities.
A drop in federal earnings and the containment of the contagion — which Nigeria has confirmed 42 cases — already on the nation’s plate suggest harsh realities for Nigerians.
But Mr Gbajabiamila, with the bill, said he hoped “to keep many people in their jobs by providing tax-based incentives for companies for as long as possible even when faced with harsh commercial realities.”
Nigeria does not have a robust system of health insurance. Hence, a large-scale breakout of the pandemic is likely to strain family finances.
The Speaker said, “in a situation where the government cannot do direct cash transfers to those most in need,” the bill, if it becomes law, “ensures that we at least can keep from taking from those who might need it during these uncertain days.”
Treated as an emergency bill, the bill passed first, second and third reading, all done within thirty minutes. The bill is now up for Senate concurrence and presidential assent for it to become law.
Both Houses adjourned plenary on Tuesday for two weeks — which is April 4.