Finance Act to drive Nigeria’s economic  recovery —Minister of Finance

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Finance Act to drive Nigeria’s economic  recovery —Minister of Finance
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The Minister of Finance, Budget and National Planning, Zainab Ahmed has said the newly signed Finance Act  would  significantly aid the recovery of the country’s economy from recession and place it on the path of growth.

Ahmed stated this during the roundtable on the Finance Act 2020 and Economic Outlook for 2021 organized by PwC Nigeria.

She explained that due to the impact of the pandemic on the domestic economy and other key macroeconomic variables, there was a clear need for proactive implementation of macroeconomic strategies that would support domestic revenue mobilisation, enhance investment inflow, stimulate job creation and restore the economy on the path of sustainable, diversified and inclusive growth.

“As a result in line with the tradition established with the Finance Act of 2019, the Federal Government proposed and passed the Finance Act, 2020 to support the 2021 Federal Budget of ‘Economic Recovery and Resilience’ by – a strategic tool for boosting stimulating business growth and improving the government’s fiscal position. The Act took effect from 1st January 2021 alongside the 2021 Appropriation Act.

“It is important to note that the Finance Act, 2020 consolidates on the fiscal reforms introduced in the Finance Act, 2019 but  is focused specifically on fiscal incentives and does not propose any new taxes or increases in existing tax rates.  The Act has introduced 80 changes to about 14 different tax laws including the Company Income Tax Act, the Capital Gains Tax Act, Stamp Duties Act, Oil & Gas Export Free Zone Act, Customs & Excise Tariff Etc. (Consolidated) Act, Value Added Tax Act, amongst others etc.

“Some of the provisions of the Finance Act 2020 are consolidated or directed at using tax incentives in the Finance Act, 2019 which were targeted at to stimulate micro, small and medium enterprises (MSMEs), given the role they play in employment generation and output growth.”

Zainab added that the Federal government will continue to create economic policies aimed at improving revenue generation, enhancing economic competitiveness, attracting foreign direct investments and encouraging domestic investors.

Commenting, Andrew S. Nevin, Partner and Chief Economist PwC Nigeria noted 10 themes that policymakers and businesses need to consider in 2021. According to him, they include, “Unlocking Nigeria’s vast dead assets to stimulate growth which priority include harnessing the Power of the Diaspora; driving export growth through services; addressing Nigeria’s big 3 distortions (exchange rate, power, and subsidies); shifting its focus from the Gross Domestic Product (GDP) lens to Sustainable Development Goals;  prioritising climate change among others.

“Nigeria holds as much as $900 billion worth of dead capital in residential real estate and agricultural land. The value of the Federal Government’s abandoned properties alone, according to the Nigerian Institute of Builders, is projected to be about N230 billion. And about a half of Nigeria’s population live in cities, of which almost 80% of them are living in substandard conditions. Finding the political will to act and unlock Nigeria’s dead real estate assets will have a transformative impact on the lives of Nigerians.”, he said.

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