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Economy & Politics

Update: FEC approves 2020 Finance bill as FG denies plans to increase taxes

The Minister of Finance, Budget and National Planning has given an assurance that the 2020 Finance Bill will not lead to an increase in tax.

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Power: Mambilla Power Project not prioritised by Ministry of Power for 2021 Budget - Finance Minister

The Federal Government on Wednesday, November 18, 2020, approved the 2020 Finance Bill to support the 2021 Budget as it says that it has no plans to increase the tax burden on Nigerians.

The decision was taken at a meeting of the Federal Executive Council (FEC) which was presided over by President Muhammadu Buhari.

According to tweet posts from the Federal Ministry of Finance, Budget and National Planning on its official Twitter handle, the disclosure was made by the Minister of Finance, Budget and National Planning, Zainab Ahmed, on Wednesday, November 18, 2020, while briefing State House correspondents on the outcome of the FEC meeting.

While explaining the contents of the bill, the minister gave an assurance that the bill will not lead to an increase in tax because the situation in the country does not warrant an increase in taxes.

She said the intent is to ease the tax burden on some categories of businesses, especially the small and medium businesses

She said, “This is not the time to increase taxes.

The minister who said that the bill will soon be transmitted to the national assembly for consideration is considered very critical to the implementation of the 2021 budget. She said the bill is designed to bring incremental changes in the nation’s tax laws.

Nairametrics had reported about 2 days ago that the Federal Government has proposed the exemption of small businesses from the payment of Tertiary Education Tax as part of the measures and incentives being introduced by the government to assist those small enterprises.

They are also 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.

 

Chike Olisah is a graduate of accountancy with over 15 years working experience in the financial service sector. He has worked in research and marketing departments of three top commercial banks. Chike is a senior member of the Nairametrics Editorial Team. You may contact him via his email- [email protected]

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Economy & Politics

CBN extends Covid-19 forbearance for intervention loans by another 12 months

CBN will continue to charge an interest rate of 5% for its intervention loans for another 1 year.

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New CBN guidelines ban MMOs, PSPs, Operators from receiving diaspora remittances

The Central Bank of Nigeria has announced an extension of its regulatory forbearance for the restructuring of its intervention facilities by another 12 months.

In a circular signed by Dr. Kevin Amugo, the Director of Financial Policy and Regulatory. the apex bank said it will continue to charge its borrowers an interest rate of 5% per annum as against the 9% originally offered. The CBN had on March 20th reduced the interest rates on its intervention loans from 9% to 5% as part of its response to the economic crunch brought on by Covid-19 induced lockdowns.

The CBN also offered to rollover moratorium granted on all principal payments on a case by case basis. All credit facilities had been granted a one-year moratorium starting from march 1, 2020 when the pandemic first gripped Nigeria.

READ: Analysing the Central Bank of Nigeria’s Dollar Remittance Policy

See excerpt from Circular

“The Central Bank of Nigeria reduced the interest rates on the CBN intervention facilities from 9% to 5% per annum for one-year effective March 1, 2020, as part of measures to mitigate the negative impact of COVID-19 Pandemic on the Nigerian economy.”

Credit facilities, availed through participating banks and OFIs, were also granted a one-year moratorium on all principal payments with effect from March 1, 2020.

Following the expiration of the above timelines, the CBN hereby approves as follows:
1) The extension by another twelve (12) months to February 28, 2022 of the discounted interest rate for the CBN intervention facilities;

2) The roll-over of the moratorium on the above facilities shall be considered on a case by case basis.

READ: Nigeria attracts more FDI than FPI for the first time in 4 years

What this means

Companies who secured intervention funds from the CBN or through any of its on-lending banks will continue to service the loans at an interest rate of 5% per annum instead of 9%.

  • They can also get another year of not needing to pay back the principal sum collection. However, they will need to apply.
  • Whilst this move helps the small businesses continue to manage their cash flow, it means the CBN will record a reduction in its income extended under such facility.
  • Regulatory forbearance is a widely adopted concept during an economic crunch and it is meant to help stimulate businesses. These pronouncements if implemented will only affect those who borrow from the CBN or BOI but those who do not will miss out.
  • Download the circular here.

READ: CBN discloses conditions for assessing N100 billion credit facility, addresses ‘process problems’

 

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Economy & Politics

Senate endorses ex-Service Chiefs as Non-career Ambassadors

The Senate has confirmed President Buhari’s nomination of the immediate past service chiefs as non-career ambassadors.

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The Nigerian Senate has endorsed the nomination of the past serving Military Service Chiefs as Non-career Ambassadors.

This was confirmed during Tuesday’s plenary session and announced in a social media statement by the Nigerian Senate.

Their confirmation follows the consideration of the report of the Senate Committee on Foreign Affairs, Chaired by Senator Adamu Bulkachuwa.

According to reports, the Senate Minority Leader Enyinaya Abaribe, however, questioned the nomination and confirmation of the ex-service chiefs when the Senate had on 3 different occasions called for their sack.

Senator Abaribe also raised issues on the petitions against the former service chiefs and questioned why they were dismissed without explanations.

But Senate President Ahmad Lawan dismissed Senator Abaribe’s concerns, ruling that the nomination of the former service chiefs cannot be nullified simply because the upper chamber had called for their sack, noting that this is totally a different assignment.

In his concluding statement, the Senate President, Senator Lawan added that these nominees that have just been confirmed have served this country to the best of their abilities. He appealed to the executive to make sure they use their experience as military men to the best.

“These nominees that we have just confirmed are nominees that have served this country to the best of their ability. Our appeal to the Executive is to make sure they use their experiences as military men to the best,” Lawan said.

Lawan, on behalf of the senate, wished them a very successful career in their capacity as Non-Career Ambassadors.

What you should know 

  • Recall Nairametrics reported earlier this month that President Muhammadu Buhari nominated ex-Service Chiefs for Senate approval as non-career Ambassadors-Designate.
  • Their appointment came barely a week after their retirement as service chiefs and their replacement with new ones.
  • This led to a spate of criticisms from some Nigerians who felt that the nation’s security situation got worse under their watch.
  • They were reported to have tendered their resignation from their positions amid heightened calls that they should be sacked due to the increasing rate of insecurity across the country.

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