Following Wednesday’s approval by the Federal Executive Council (FEC), the 2020 Finance Bill that seeks to provide more tax incentives for Nigerian businesses and individuals has been formally presented to State governors under the aegis of the National Economic Council (NEC), at a meeting presided over today by Vice President Yemi Osinbajo, SAN.
Some highlights of the proposed bill which is now headed to the National Assembly include:
1. Reduction in duties on tractors from 35 to 10 per cent
2. Reduction in duties on motor vehicles for the transportation of goods from 35 to 10 per cent.
3. Reduction of levy on motor vehicles for the transportation of persons (cars) from 35 per cent to 5 per cent.
4. Exemption of small companies from payment of education tax under the Tertiary Education Trust fund (TETFUND)-companies with less than N25m turnover are eligible
5. 50 per cent reduction in minimum tax; from 0.5 per cent to 0.25 per cent for gross turnover for financial years ending between January 1st, 2020 and December 31st, 2021.
6. Granting of tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID).
7. 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.)
8. Introduction of software acquisition as qualifying capital expenditure to improve the ease of doing business.
Minister of State for Budget and National Planning, Mr Clem Agba made the 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:
OTHER HIGHLIGHTS OF TODAY’S NEC MEETING INCLUDE:
FINANCIAL UPDATES BY MINISTER OF STATE
The Minister reported to council that the balances in the under listed accounts are as follows:
Excess Crude Account (ECA) balance as at 17th November 2020 stands at $72,409,970.48
Stabilization Account balance as at 17th November 2020 stands at N49, 151,181,622.35
Natural Resources Development Fund Account balance as at 17th November 2022 stands at N155, 530,778,234.58
PRESENTATION ON NEC AD-HOC COMMITTEE ON PUBLIC ENGAGEMENT BY THE COUNCIL CHAIR
A committee chaired by the Vice President for NEC to engage with youths and other critical stakeholders in addressing the deeper roots of the ENDSARs protests was formed at the last meeting of NEC.
Members of the Committee are governors drawn from the 6 geopolitical zones in the country. They are, Aminu Waziri Tambuwal, Sokoto State Governor representing northwest; Prof. Babagana Umara Zulum, Borno State Governor representing northeast; Abubakar Sani Bello, Niger State Governor representing northcentral; Rotimi Akeredolu, SAN, Ondo State Governor representing southwest; Engr. Dave Umahi, Ebonyi State Governor representing southeast; and Dr Ifeanyi Okowa, Delta State Governor representing south-south.
• The Committee is to engage the youth, religious organization, civil society, security agencies regarding the issues and recommend effective solutions towards strengthening national unity among others
In today’s presentation, the Chair updated the Council that the Committee resolved as follows:
• There should be two broad levels of engagement, one with state and the second with zonal levels.
• All Governors should commence engagement within a week.
• Guidelines of engagement process should be developed.
• Engagement to include meetings with the youths and community leaders etc.
• The focus to be on young people.
• Engagement process.
