As governments of the world continue to release stimulus plans to cushion the effect of the COVID -19 on the citizenry, stakeholders have called on the Federal Government to take a cue and suspend Value Added Tax (VAT), make electricity available and free for citizens within the period of the crisis.
They opined that the palliatives from the Federal Government, the Central Bank of Nigeria (CBN) and private sector, which has helped to an extent in mitigating the effects of the pandemic, might not do much without a fiscal stimulus because of the peculiarity of the situation.
Warning that nothing short of a fiscal intervention by the Federal Government would sufficiently mitigate the suffering which the citizens are going through, they said since the Nigerian system is not structured, it will be difficult to put in place a stimulus plan that could directly reach all.
They are of the view that suspension of VAT, reduction of fuel price, availability of electricity and free for citizens, and free transportation, will go a long way to relieve the burden because of the direct impact they have on every Nigerian. With the lockdown, schools are shut, churches, mosques, many businesses have scaled down activities, joblessness will increase, and people will no longer be able to sustain themselves as purchasing has decreased. Nigerians are expecting government to ensure that they survive the challenge and the meltdown caused by the pandemic.
Stimulus packages and palliatives by the Federal Government and others should be available to all and not a select few. Access to free healthcare in public and private medical facilities during the period of the economic crisis is also important.
Adding that extra measures are need ed to be taken to mitigate the effect of the double crisis; the health crisis and economic crisis, the stakeholders are also suggesting that the Federal Government should allow importation of drugs and foods, which the country cannot produce to save Nigerians from dying during this crisis.
Since central banks and governments of developed economies are already taking similar measures and more to avoid a collapse of their respective economies, it is expected that Nigeria should not be indifferent.
According to the People’s Democratic Party (PDP) caucus in the House of Representatives, the Federal Government should stop VAT on goods and services and further reduce pump price of fuel to be at par with the reduction in crude oil price.
President of the Lagos Chamber of Commerce and Industry (LCCI), Mrs. Toki Mabogunje, in her view , believed that there is need for the Federal Government to invoke appropriate executive orders on import duties and tax waivers for medical equipment, pharmaceutical products, food processing, raw materials, intermediate products and other essential items to boost the essential critical sectors of the economy to produce massively for the populace.
She explained that there should be seamless access to medical and food supplies, especially by the vulnerable groups which is paramount at this time of lockdown due to the COVID-19 pandemic.
According to her, the chamber was aware of the severity of the pandemic and what it has caused the country, adding that its impacts have been monumental and unprecedented to the government, Nigerians and other parts of the world.
President of Manufacturers Association of Nigeria (MAN), Mansur Ahmed, alluded to the fact that government should consider the introduction of fiscal measures such as waivers on import duties on Active Pharmaceutical Ingredients (APIs), and other essential products. Others, according to him, is for government to extend tax holiday to companies on corporate tax, as this will help lower import costs, protect against shortages, and reduce the burden of personal income tax as a way of increasing the disposable income of an average Nigerian worker.
Managing Director of Kawai Technologies and deputy chairman of Lagos Chamber of Commerce and Industry (LCCI), Akinbo Akin-Olugbade, said countries of the world have been releasing intervention funds to stem the losses suffered by businesses, pointing out that a tax break will go a long way as a fiscal stimulus.
He added that the federal and state governments needed to put in place emergency measures to stem the losses, adding that the most impacted will be small and medium enterprises (SMEs) as well as workers in the informal sector who will be the hardest hit as they typically earn wages by the day.
The Kawai Tech boss also solicited tax incentives and breaks to be given to the communications sector to deepen the Internet infrastructure, deploy broadband services to more parts of the country. He added that telcos need to reduce the costs of data as the economic situation has shown the need for online services as a backup; “banking, insurance, education, communication can all be done online if the appropriate infrastructure exists. Deliveries can be booked online as well as many other production-based services.”
On his part, the President of the Pharmaceutical Society of Nigeria (PSN), Mr. Sam Ohuabunwa, said he was in support of anything that could relieve Nigerians of their burdens.
He pointed out that under normal condition, most Nigerians cannot meet their basic needs even when they struggle seven days a week. “How much more now that they are asked to stay at home for good, without earning income.”
He urged the Federal Government to do whatever it can do within its power to relieve the burdens of Nigerians while at home to curb the spread of the disease because hunger can cause people to disobey government’s order and go in search of food.
The PSN boss said giving that the country is in a situation of low revenue and reserve, it may be practically impossible to pay everybody, who has lost income, reduce or suspend VAT for companies as a relief, so that we all don’t go into loss as the country is already slipping into recession.
“Government can intervene in any organ it has control over, like they have asked the Bank of Industry, Bank of Agric, and others to give longer moratorium and bring down their interest rates as CBN has done.
He opined that tax and VAT reduction, subsidy in electricity, should be considered by the government so that people can be reasonably restrained at home. “When people are hungry, they will go out in search of food, they will disobey government, but the risk is not just endangering their lives but that of others.”