The federal government says there will be tax breaks for companies that employ more staff.
A tax break is a benefit that the government offers in terms of tax deduction, credit, exemption, or exclusion that helps individuals and businesses save money on their tax bills.
Speaking during an interview on AIT on Tuesday, Wale Edun, minister of finance and coordinating minister of the economy, said the tax breaks will be included in the Inflation Reduction Act.
“The Inflation Reduction Act will now contain a range of import duty exemptions, such as lowering of tariffs and outright tax breaks, for instance, for employment,” Edun said.
“If you employ more people, you will be given a tax break against it. So that range of fiscal incentives will also be laid out in an executive order, which Mr. President will in due course sign.”
The minister said this is part of the steps the federal government is taking to counteract the increase in costs of operations elevated mostly by the movement in the foreign exchange (FX) rate for companies that import, process and add value to raw materials.
“Where we are on VAT is that a whole range of items from CNG to pharmaceutical products and so forth are exempt from VAT. It’s an executive order. I will sign it. It is currently with the ministry of justice,” Edun said.
“Withholding tax, which essentially saves the working capital of companies, is removed for all manufacturing, many small and medium-scale enterprises, food production, food processing companies, a whole range. And it will be listed in an executive order, which I am also authorized to sign.”
Speaking on the timeline, Edun said the executive order will be out in one or two weeks.
“I would say that in the next week or two it should be out. It has to go through certain regulatory, certain legal processes, but there is nothing holding it up except just the administrative processing, which we will ensure will be quick,” he said.
Nigeria’s inflation rate rose to 34.19 percent in June 2024 — up from 33.95 percent in May.
To tame inflation, the monetary policy committee (MPC) of the Central Bank of Nigeria (CBN) on July 23 increased the lending rate by 150 basis points to 26.75 percent.