Federal Government Proposes A New Tax Relief Plan
The Federal government has announced plans to offer tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition, CACOVID in the forthcoming 2020 Finance Bill.
The Minister of Finance, Budget and National Planning, Zainab Ahmed disclosed that the reduced tax relief plan by the government will help stimulate the development and growth of companies that have been affected by the economic downturn brought about by the coronavirus pandemic.
Some highlights as contained in the proposed bill includes
- Reduction in duties on tractors from 35 to 10 per cent
- Reduction in duties on motor vehicles for the transportation of goods from 35 to 10 per cent
- Reduction of levy on motor vehicle for the transportation of persons and cars from 35 per cent to 5 per cent
- 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 1, 2020, and December 31, 2021.
- Granting of tax relief to companies that donated to the COVID-19 relief fund under the private sector coalition (CACOVID.)
- 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.)
- Introduction of software acquisition as qualifying capital expenditure to improve the ease of doing business.
It should be noted that the proposed bill has been presented to the parliament and will hopefully be attended to before the next fiscal year.
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