Covid-19: Reps pass Economic Stimulus Bill

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.
Dubbed the 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.
It also aims at protecting 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.
Because of 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.
Sponsored by the Speaker Rep. Femi Gbajabiamila, the Deputy Speaker Rep. Ahmed Idris Wade and the eight other principal officers of the House, the bill also provides for a moratorium on mortgage obligations for individuals at a time of widespread economic uncertainty.
Also, the bill 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.
In essence, the Emergency Economic Stimulus Bill, 2020, will provide a new regime of corporate tax rebates to encourage companies in the country to maintain their payroll status for the immediate term.
Justifying the reason for the provision above, 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.”
Leading the 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 noted 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.
He 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.
Gbajabiamila said: “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.”
The Speaker argued further that as Nigeria does not have a robust system of health insurance, a large scale 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.
With 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 his assent.
Legislative vibes.
Tuesday, March 24, 2020
Categories: Uncategorized

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