Minister, stakeholders brainstorm on economic recovery, growth
Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, gave the hint yesterday at PricewaterhouseCoopers (PwC) Nigeria’s executive roundtable on the Finance Act 2020 and Economic Outlook for 2021.
The Finance Act 2020 focuses on supporting vulnerable households and businesses while improving fiscal discipline and procurement efficiency, enhancing economic competitiveness, encouraging domestic investors and macroeconomic stability amid challenges of the COVID-19 pandemic.
The newly enacted Nigeria Businesses in Nigeria showed 92% public support for the Finance Act 2020, while the majority of Nigerians showed excitement over the reduction of taxes from 0.5% to 0.25% of turnover.
The roundtable, which targeted chief executive officers (CEOs), C-suite executives, micro, small and medium enterprises (MSMEs), focused on the impact of changes the Finance Act 2020 would have on existing laws, other government policies, businesses and taxpayers.
Country Senior Partner, PwC Nigeria, Uyi Akpata, said considering the impact of COVID-19 pandemic on Nigeria’s economy, it was important for businesses to understand the forces that would shape the economy in 2021.
“This knowledge will help them to minimise potential risks and take advantage of the fiscal policies the government has enacted to stimulate economic recovery,” he stated.
Partner and Chief Economist of PwC Nigeria, Andrew S. Nevin, dwelled on 10 themes policymakers and businesses should consider in 2021.
“We must find innovative ways to unlock Nigeria’s vast dead assets to stimulate growth, harness the power of the Diaspora, drive export growth through services, growth across the country and not just a few urban centres, and improve the country’s low investment and gross capital formation,” he said.
He stressed that the value of Federal Government’s abandoned property according to the Nigerian Institute of Builders (NIOB), was estimated at about N230b, adding that about half of Nigeria’s population live in cities, 80 per cent of who live in substandard conditions.
Fiscal Policy Partner and West Africa Tax Leader of PwC Nigeria, Taiwo Oyedele, highlighted how the Finance Act 2020 and other changes to existing laws would shape Nigeria’s tax environment in 2021, noting that there were no easy choices on the limited fiscal space for incentives to deliver on counter-cyclical measures.
While commending government’s policy decision not to introduce new taxes or increase existing ones, he canvassed permanent removal of taxes on vulnerable companies, especially those operating at losses.
Unveiling the results of a survey conducted by PwC, Oyedele revealed that respondents were asked to indicate which changes in the Finance Act 2020 they disagreed with.
“Over half or 59.7% said they disagree with the idea of transferring unclaimed dividends and dormant account balances to a trust fund. 31.2% rejected the plan to introduce excise duty on telecommunications services followed by 30.3%, who disagreed with the Federal Inland Revenue Service’s (FIRS) deployment of technology to plug into taxpayers systems,” he said.
He added that respondents were also asked to indicate which three government initiatives they would support to fund the budget deficit and absorb tax reliefs, adding that 67.8% favoured the use of technology to track tax evaders.
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