The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, has unveiled plans for the federal government to introduce tax incentives, including outright tax breaks, for companies that expand their workforce.
Furthermore, the government intends to suspend import duties on select goods to combat the escalating inflation rate.
In an exclusive interview on AIT’s Money Line, Minister Edun disclosed that these measures are integral to the upcoming Inflation Reduction Act, which is slated for presidential assent in the coming weeks.
The fiscal measures are designed to offset the heightened cost of production faced by businesses, primarily resulting from the depreciated exchange rate and other policy measures implemented by the current administration.
By implementing these measures, the government aims to support businesses, stimulate economic growth, and address the pressing issue of inflation.
He said, “The inflation reduction act will now contain a range of import duties, exemptions, lowering of tariffs, and outright tax breaks for employment. If you employ more people, you will be given a tax break against it. So, a range of fiscal incentives will be laid out in an executive order which Mr. President will in due course sign.”
The Minister also revealed that the federal government spends around $600 million monthly on petrol imports. He mentioned that the high fuel import bill is attributed to neighbouring countries, extending to Central Africa, benefiting from Nigeria’s fuel imports.
Edun said there is a concerted effort to ensure homegrown food availability. According to him, in the short term, apart from distributing grains from the strategic reserves, a window has been opened for importation due to the President’s commitment to drive down prices and make food available immediately.
He assured everyone that this measure would not undermine local farmers, as importation would only be allowed after exhausting local supplies. Edun explained that one of the conditions for importation would be that all locally available produce in the markets or with millers has been utilized, with auditors in place to verify this.
He noted that these interventions aim to reduce inflation, stabilize exchange rates, and lower interest rates, thereby creating a conducive environment for investment and job creation.
However, the minister explained that they have not approached the central bank to request funds for paying government debts or salaries, known as Ways and Means. Instead, they have utilized market instruments to reduce what they owed, which is crucial for maintaining a strong economy.
He clarified that although the limit was raised to 10 per cent, it does not necessarily mean it will be used. This increase serves as a fail-safe, providing extra flexibility to cover payments if there is a timing gap between incoming revenue and expenses.
