The Chartered Institute of Taxation of Nigeria has recommended to the Federal Government of Nigeria, a number of immediate interventions within the next few months to cushion the effects of the COVID-19 pandemic on businesses. One of the interventions is what the Institute tagged ‘tax rates reduction and tax payments’. In a position paper titled “Coronavirus – Government Actions, Tax Implications and CITN’s Recommendations”, signed by the Institute’s President/Chairman of Council, Mrs. Olajumoke Simplice, the Institute recommends the following for the 2020 Tax Year:
i. A reduction of Companies Income Tax (CIT) rate from 30% to 20% for large companies
ii. A reduction of CIT rate from 20% to 15% for medium companies liable under the Finance Act
iii. Suspension of the minimum tax provision
iv. Extension of period of filing tax returns and due date of payment by three months.
The Institute added the above added more benefits and far-reaching impact on companies than the 50% of Pay-As-You-Earn (PAYE) as a rebate for CIT, and that companies would be encourage to retain their employees.
The Institute noted that the above recommendations are in consonance with the principles of simplicity and certainty of taxation.
Other short-term recommendations by the Institute are but not limited to the following:
i. Grants and loans by CBN and Commercial Banks
ii. Deferral of Mortgage Obligations and Rebate for Rent and Lease Obligations
iii. Establishment of Food and Nutrition Assistance Fund
iv. Support the purchase of Medical Equipment and Medical Goods.