Economy

State Governments to get $2.5 million performance-based grants for tax relief programs

The Nigerian Governors’ Forum has announced that each state government would receive $2.5m performance-based grants for implementing tax relief programmes for individual taxpayers and businesses to mitigate COVID-19 impact.

The forum disclosed this in a statement issued by the Head, Media and Public Affairs of NGF Secretariat, Mr. Abdulrazaque Bello-Barkindo, in Abuja on Sunday, after a virtual meeting jointly organised by the World Bank and the forum.

The forum, however, noted that only states that met the deadline and required conditions for the tax relief programme would benefit from the incentive.

The virtual meeting, according to the statement, was held under the States’ Fiscal Transparency, Accountability and Sustainability (SFTAS) Programme for Results, midwifed by the Federal Ministry of Finance, Budget and National Planning (FMFBNP).

“These efforts are being incentivised by a new Disbursement Linked Indicator (DLI) under the FMFBNP World Bank $750 million SFTAS Programme for Results.

“Eligible States will be rewarded with $2.5m each in performance-based grants if they announce by July 31 and implement by ? Sept. 30 a tax compliance relief programme for individual taxpayers and businesses to mitigate the COVID-19 impact.

“However, there are criteria to be met if a state is to receive the $2.5m.

“These are that, State announcements should be signed by the commissioner of finance or the executive chairman of the State Internal Revenue Service and published on State websites and in national dailies to ensure widespread awareness among taxpayers.

“Furthermore, the State government should issue to their tax officials and collecting agents, guidelines for the implementation of the reliefs to ensure consistent execution by all and sundry.”

The statement disclosed that the 36 states were introducing tax relief programmes to mitigate the impacts of the COVID-19 pandemic on businesses and individual taxpayers and ensure the speedy recovery of State economies

The statement also said that “the extent to which government revenues will be impacted by these reliefs will depend on the type of relief that they grant and their ability to raise their tax efforts simultaneously, including offering incentives for greater tax compliance”

The virtual meeting was attended by 125 participants from the 36 States of the Federation including State Commissioners of Finance and Executive Chairpersons of State Internal Revenue Services.

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