TAX AND ECONOMIC MEASURES IMPLEMENTED IN NIGERIA TO CUSHION THE EFFECT OF THE COVID-19 PANDEMIC
It is no longer news that the global COVID-19 outbreak is affecting the smooth operation of business activities around
the globe. As a result, different measures have been taken globally to cushion the economic effects of this pandemic.
We have consolidated all the measures taken by different parastatals so far in Nigeria.
Indirect Tax Measures:
- Creation of e-platforms for filing of tax returns, payment of taxes and application for Tax Clearance Certificates by the Federal Inland Revenue Service (FIRS).
- Extension of the timeline for filing Value Added Tax from the 21st day to the last working day of the month following the month of deduction.
Corporate Income Tax Measures:
- Extension of the timeline for filing Companies Income Tax returns by one month.
- E-filing platform/e-mail addresses created to enable submission of returns at various tax offices.
- Creation of avenues to file returns without audited financial statements, provided that the relevant audited accounts are submitted within two months of the revised date of filing.
- Extension of the timeline for filing Withholding Tax from the 21st day to the last working day of the month following the month of deduction.
- Refund of 50% of the income tax paid on employees' salaries during the period provided there is no retrenchment of staff from March 1 till December 31, 2020.
- Filing of annual returns for individuals, including self-employed persons now extended from March 31, 2020, till May 31, 2020.
- All payments of mortgage obligations on residential mortgages obtained by individual contributors to the National Housing Fund are deferred for a period of 180 days effective from 1st March 2020.
- Creation of e-platform for filing Transfer Pricing returns, Country-by-Country Reporting notification forms and Country-by-Country Reports.
- Waiver of import duty will be granted on the importation of medical equipment, medicines, personal protection equipment and other such medical necessities required for the treatment and management of the Covid-19 disease in Nigeria from March 1, 2020, till December 31, 2020.
Tax Audits and Controversies:
- The Federal Inland Revenue Service intends to publish on its website, information requests for desk reviews and tax audits, and create a portal where such information can be uploaded to the database for online access review.
- Reduction of interest rates by Banks on intervention facilities from 9% to 5% retroactively from March 1, 2020.
- The Nigerian Stock Exchange granted listed companies a 60-day grace period for the submission of their audited financial statements for the year ended December 31, 2019.
- The National Insurance Commission (NAICOM) gave a 1-month extension for submission of 2020 first-quarter returns by insurance firms.
- Additional moratorium of 1 year on Central Bank of Nigeria intervention facilities.
- The Central Bank of Nigeria has created a target credit facility of ₦50 billion for affected households and small and medium enterprises.
- The Central Bank of Nigeria has granted regulatory forbearance to banks to restructure terms of facilities in affected sectors.
- Improving FX supply to the CBN by directing oil companies and oil servicing companies to sell FX to the CBN rather than the Nigerian National Petroleum Corporation.
- The Central Bank of Nigeria has initiated an additional ₦100 billion intervention fund in healthcare loans to pharmaceutical companies and healthcare practitioners intending to expand/build capacity.
- Identification of a few key local pharmaceutical companies that will be granted funding facilities by the Central Bank of Nigeria to support the procurement of raw materials and equipment required to boost local drug production.
- Creation of ₦1 trillion in loans by the Central Bank of Nigeria to boost local manufacturing and production across critical sectors.
- Reduction of petrol pump price from ₦145 to ₦125/litre by the Federal Government.