The Federal Government is proposing a reduction of the minimum tax rate to be paid by companies in the next fiscal year, due to the current economic climate exacerbated by the devastating impact of the coronavirus pandemic.
In the new proposal, the Federal Government plans to reduce the minimum tax rate from 0.5% to 0.25% of the gross turnover of the company.
According to a report from Punch, this disclosure is contained in the new draft Finance Bill 2020, which is being proposed by the Fiscal Policy Reforms Committee that was set up by the Federal Ministry of Finance, Budget and National Planning, and chaired by the Special Adviser to the President on Economic Matters, Dr Adeyemi Dipeolu.
The document from the Fiscal Policy Reforms Committee partly reads, “In light of the current economic climate, it is proposed that the rate of minimum tax is reduced from 0.5 per cent to 0.25 per cent of gross turnover, for the period ending between January 1, 2020, and December 31, 2021.’’
It should be noted that the Finance Bill 2019 which was assented to by President Muhammadu Buhari, changed the basis for computing minimum tax to 0.5% of the gross turnover of the company.
Minimum tax by definition is a tax that is payable by companies having no taxable profits for the year or where the tax on profits is below the minimum tax.
However, according to PricewaterhouseCoopers, some businesses that are exempted from the minimum tax in the first 4 calendar years of business operations include agriculture business or small companies.
The committee is also proposing a modification of the definition of the gross turnover, as the definition of gross turnover in Finance Act 2019 did not explicitly clarify the scope of income to consider in determining the gross turnover of a company for minimum tax purposes.
What you should know
Nairametrics had earlier reported that the Federal Government was proposing the exemption of small businesses from the payment of Tertiary Education Tax (TET), which is being collected by the Federal Inland Revenue Service (FIRS) in the new draft Finance Bill 2020.
This was seen as part of measures and incentives introduced by the government to assist small businesses who are still battling with the devastating impact of the coronavirus pandemic outbreak.
CBN’s Emefiele vows to reject the continuous importation of maize in Nigeria
The CBN has said that it will oppose all attempts to continue the importation of maize into the country.
The Central Bank of Nigeria (CBN) has said that it will oppose all attempts to continue the importation of maize into the country.
This is geared towards encouraging local production as the apex bank believes that maize farmers in Nigeria have what it takes to close the maize demand gap of over 4.5 million metric tonnes in the country.
This was made known by the CBN Governor, Godwin Emefiele while speaking in Katsina on Thursday during the unveiling of the first maize pyramid and inauguration of the 2021 maize wet season farming under the CBN-Maize Association of Nigeria Anchor Borrowers’ Programme.
Emefiele said, “With over 50,000 bags of maize available on this ground, and others aggregated across the country, maize farmers are sending a resounding message that we can grow enough maize to meet the country’s demand.’’
He explained that the maize unveiled at the ceremony would be sold to reputable feed processors adding that this would in turn impact positively on current poultry feed prices, as over 60% of maize produced in the country were used for producing poultry feed.
Emefiele said that the apex bank was ready to provide support to the youths that are willing to engage in agriculture and encouraged them to embrace agriculture.
Speaking at the event, the Katsina State Governor, Bello Masari, said the state had suffered a setback in agriculture as over 60,000 hectares of farmlands were uncultivated due to insurgency, which hindered farmers from gaining access to their means of livelihood.
On his part, President Muhammadu Buhari, who was represented by the Kebbi State Governor, Atiku Bagudu, while unveiling the pyramids, reassured the farmers, processors and other value chain participants, of the support of government towards ensuring that they perform optimally.
What you should know
It can be recalled that in July 2020, the CBN included maize importation to its list of 41 items banned from assessing forex at the official market as it directed all banks/authorised dealers to immediately discontinue the processing of Forms M for maize/corn importation into the country.
The apex bank in its circular said that this measure is aimed at increasing local production of the commodity, stimulating a rapid economic recovery, safeguarding rural livelihoods and increasing jobs.
FG releases N29.1 billion advance for deployment of Covid-19 vaccines
The FG has announced the release of N29.1 billion to the NPHCDA as an advance for the operational cost of deployment of the Covid-19 vaccines.
The Federal Government has announced the release of N29.1 billion to the National Primary Health Development Agency (NPHCDA) as an advance for the operational cost of deployment of the Covid-19 vaccines.
This is as the government has expressed its commitment to procuring 29.588 million doses of the Johnson & Johnson vaccine through the AVAT initiative, coordinated by AFREXIMBank,
This disclosure was made by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed while speaking at ‘Collaborative Africa Budget Reform Initiative (CABRI) General Assembly webinar on Friday.
What the Minister of Finance, Budget and National Planning is saying
Ahmed in her statement said, “Therefore, the supplementary budget for COVID-19 vaccines will cover the cost of additional vaccines over and above those provided by COVAX, as well as the full cost of operations and logistics for delivering the vaccines around the country.
“Already, the sum of N29.1bn has been released from the Routine Immunization budgetary provision (Service Wide Vote) to the National Primary Healthcare Development Agency (NPHCDA) as an advance for the operational cost of deployment of the COVID-19 vaccines. The N29.1bn represents about 52 percent of the amount required over 2021-22”, she said.
Mrs Ahmed stated at the 18th General Assembly of CABRI that the World Bank has indicated willingness to provide needed facilities in support of the country’s Covid-19 vaccination plan.
Considering key elements of Nigeria’s vaccine financing strategy, she said that the government is working on a supplementary budget to provide for the cost of vaccine procurement and delivery
She said, “The Federal Ministry of Health plans to vaccinate 70 per cent of eligible (18 years and above) Nigerians over the 2021 and 2022 fiscal years.”
She noted that the nation has received commitments from COVAX for Covid-19 vaccines that could cover 43.1 million of the eligible population, as donations from some development partners.
On the impact of the Covid-19 pandemic and the oil price crash on the Nigerian economy, she noted that prior to the pandemic, implementation of the Economic Recovery and Growth Plan 2017-20, prudent resource management and fiscal policy implementation had resulted in 11 consecutive quarters of GDP growth, with GDP growth rising from 1.91% in 2018 to 2.27% in 2019.
Mrs Ahmed also noted that “the government had begun the process of moving our economy away from its primary dependence on oil for revenues and foreign exchange, and we’re making steady gains in addressing infrastructure and human capital challenges.”
“FGN is committed to procuring 29.588m doses of Johnson & Johnson #vaccine through the AVAT initiative, coordinated by @afreximbank”- HM @ZShamsuna speaking recently at ‘Collaborative Africa Budget Reform Initiative (CABRI) General Assembly webinar.
— Ministry of Finance, Budget and National Planning (@FinMinNigeria) May 7, 2021
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.
- Cadbury Nigeria Plc set to hold 56th Annual General Meeting (AGM) on June 16.
- FCMB Group Plc appoints Muibat Ijaiya as Director.
- Afromedia Plc reports a loss after tax of N27.3 million in Q1 2021.