In response to ongoing health and economic challenges caused by the COVID-19 pandemic, the federal government has adopted counter-cyclical fiscal policies to accelerate economic recovery, said the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
She stated this at the public consultation for the Finance Act 2020, a statement from the ministry has indicated.
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“Economic activities in the country are recovering gradually, reflected by a reduced contraction of 3.6 per cent in the third quarter of 2020, compared to the 6.1 per cent contraction in the previous quarter,” she said.
“The Finance Act 2020 provides fiscal relief for minimum wage earners (who are exempt from personal income tax), as well as commuters and other consumers of road transportation goods and services (who will now pay lower levels of duties and levies on imported vehicles).
“The Finance Act 2020 extends the corporate income tax exemption in the Finance Act 2019 for micro and small enterprises with an annual turnover of N25m or less to include exemption from paying tertiary education tax,” Zainab noted.
The minister also said the fiscal stance in the Finance Act 2020 was to moderate fiscal incentives, defer tax increases and new taxes till the economy recovers, and to foster greater congruence across the government’s fiscal, monetary, trade and investment policies.
While pacifying reactions on issues with the act, she said: “Consequently, if any reforms proposed by key stakeholders have not been reflected in the Finance Act 2020, there will be other opportunities to include deserving reforms in subsequent finance acts, or indeed, the wholesale amendment of other fiscal and economic laws.”