The Federal Government has rejected calls from some critics for the reduction of taxes as part of the palliatives to reduce the adverse socio-economic effect of the coronavirus outbreak.
This was disclosed by the Minister for Finance, Budget and National Planning, Zainab Ahmed, on Tuesday, April 7, 2020, during an interview on a monitored television programme.
The Minister said the government would rather be looking at the option of tax deferral than tax reduction, as the tax deduction might not really have the desired effect.
She said that the corporate organizations and individuals could get tax relief based on their donations towards the relief fund for the COVID-19 pandemic.
During the interview, the Minister said, “It was fortuitous when we did the finance bill in 2019, we were looking at how to strengthen the economy and enhance the growth of small-medium businesses and we made a provision that now allows by law for small businesses to pay no company income tax, so they pay zero tax and the medium-sized businesses paid a reduced tax of 20%’’
‘’This is an action that other countries are taken now, but this is something we had planned not even knowing that there was going to be an economic downturn.
’Then I said for the big corporates whose companies’ income tax is at 30%, we are going to be looking at options of deferral, not reduction of taxes, so we could defer their taxes, and also encouraging corporate or even individuals to support the COVID-19 response and any support you provide will be tax-deductible, so it’s also a tax relief.”