COVID-19: States to get $2.5M world bank grant if they implement tax relief for individuals, businesses

The World Bank has said it would be providing states with $2.5m each to mitigate the negative impact of the Coronavirus pandemic

The bank said the fund is a performance-based grants if the states implement, tax relief programmes for individuals and business owners by September 30.

A statement signed by Abdulrazaque Bello-Barkindo, Head, Media and Public Affairs, Nigeria Governors Forum, said the fund is part of World Bank’s efforts to mitigate the impact of the covid-19 pandemic.

The tax relief programmes include extension of filing and payment dates; tax moratoriums; waivers or reduction of penalties, and interests over the extension period.

The statement reads in part, “The 36 states of the federation are introducing tax relief programmes to mitigate the unending toll of the COVID-19 pandemic on businesses and individual taxpayers and ensure the speedy recovery of state economies.

“State governments are themselves currently experiencing a liquidity crisis of their own; and with limited capacity to borrow, it has become imperative that they find a balance between granting tax reliefs and maintaining revenues at a sustainable level.

“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.

“These efforts are being incentivised by a new Disbursement Linked Indicator under the Federal Ministry of Finance Budget and National Planning World Bank $750m States Fiscal Transparency, Accountability and Sustainability Programme for Results.

“Eligible States will be rewarded with $2.5m each in performance-based grants if they announce by 31st July, 2020, and implement by ‪30th September, 2020, a tax compliance relief programme for individual taxpayers and businesses to mitigate the COVID-19 impact.”