The umbrella organization for Nigeria’s private sector has asked the federal government for a tax holiday and other alleviating measures to help relieve the sector of the distress brought by the global COVID-19 outbreak.
Implications of the ongoing pandemic on the private sector could be severe enough to cause the closure of companies and massive job losses, the Organized Private Sector said in a letter to President Muhammadu Buhari on Tuesday.
Beyond the consequences of the virus outbreak on corporates, the government would also lose revenue through the payment of taxes, OPS said, while the resulting economic crisis could lead to an increase in social vices and insecurity unless the government intervened soon.
Acknowledging the central bank’s interventions, which are targeted at ensuring business continuity, OPS called on the government for more palliatives for companies, citing closures and partial lockdowns around the country as developments that could heavily affect the sector.
“The Real sector is facing the risk of total shut down, as there are no imports and exports, sales are down and production at almost zero levels,” the letter read. “At the same time workers are expected to be paid and other commitments honoured by businesses.”
The body has asked for a “temporary scheme” for compensating companies at risk of laying off in order to retain jobs. “This is to aid the continued existence of companies and prevent layoffs within private companies facing financial pressures as a result of Coronavirus,” it said in the letter signed by the Timothy Olawale, head of Nigeria Employers’ Consultative Association.
Under the scheme, which OPS said could last for the next three months, the government is required to cover 60 percent of the salaries of employees paid on a monthly basis, who would otherwise have been fired, with companies paying the remaining amount.
Since business activities had been gravely affected by the crisis, the group wants government support to negotiate and reschedule bank loans, especially those taken in the last three months, and a suspension of taxes and levies.
OPS also requested a tax-free cash flow boost for employers – a stimulus package to help pay wages or for investment to protect against downturn inactivity – and tax payment deferrals for businesses with a turnover of less than ₦50 million, particularly in sectors most affected by the crisis. In addition, employees who are self-isolating or those diagnosed with the virus should receive payment support from the government, to encourage disclosure and help contain the spread.
Governments across the world are implementing measures similar to the demands of the private sector to minimize the COVID-19 impact on economic activity, protect companies and guarantee job security for citizens. According to the NECA boss, Africa’s biggest economy has to follow in the footsteps of those countries as it would help the private sector continue producing in order to meet the basic needs of the people and thus prevent panic buying.