ESP, Finance Bill contains some reforms
PricewaterhouseCoopers (PwC) has said that implementation of fiscal reforms will be critical to ensuring that the Nigerian economy makes a quick exit from its current recession.
The professional services firm, which stated this in its December “Economic Alert” publication, obtained by New Telegraph yesterday, noted that although the current recession is one of the deepest in decades, it, “offers opportunity for extraordinary reforms…”
According to the firm, “at the core of the best and most effective approach to expediting Nigeria’s economic recovery is the implementation of fiscal reforms, some of which have been captured in the Nigeria Economic Sustainability Plan (NESP).
“In addition, the Finance Bill 2020 seeks to stimulate economic growth and drive sustainable development. Some of the key considerations of the Bill include: A 50 per cent reduction in the minimum tax rate from 0.5 per cent to 0.25 per cent of gross turnover for financial years ending between January 1, 2020 and December 31, 2020; reduction to the rate of import duties on motor vehicles and tractors – to five per cent and 10 per cent respectively, among others.”
However, noting that resources available to the government to support growth and development are limited, PwC stressed that “the limited resources are to be deployed optimally to address the low hanging fruits that will lead to economic growth and transformation in the short to medium-term.”
Although the firm noted that going by the 3.6 per cent real GDP contraction in Q3’ 2020 means that the share of Nigeria’s real GDP loss in the period is larger than the economies of Sierra Leone, Liberia, Gambia, Lesotho, among others, it pointed out that the country’s leading indicators show that the expected pace of recovery in Q4’20 could reflect an improvement from the previous quarter.
“The purchasing managers’ index shows a marginal uptick in October/November compared to the third quarter of 2020, which also aligns with the consumer and business expectation survey reported by the Central Bank of Nigeria (CBN)