ICYMI: COVID-19 donations will be excluded from taxable income, says Zainab Ahmed

Zainab Ahmed, minister of finance, budget and national planning, has said that COVID-19 donations by companies would be excluded from taxable income.

In an April 7 tweet, the minister said circulars and ministerial orders will be released to that effect.

“I will be issuing circulars and ministerial orders to ensure that charitable donations by benevolent companies to support our #COVID19 pandemic efforts are tax-deductible, pursuant to section 25 of the Companies Income Tax Act,” she wrote.

Tax-deductible income is usually excluded from taxable income.

Federal Government will be issuing circulars and Ministerial Orders to ensure that charitable donations by benevolent companies to support our #COVID19 pandemic efforts are tax deductible, in line with Section 25 of the Companies Income Tax Act.

— Zainab Shamsuna Ahmed (@ZShamsuna) April 7, 2020

Several donations have been made in cash and kind by corporates and individuals to fight the pandemic.

Ahmed also said Nigeria was not listed as a beneficiary of debt relief by the International Monetary Fund (IMF) because the country is not indebted to the IMF.

On Monday, April 13, IMF had approved immediate debt relief for 25 countries including 19 African countries.

“It is true Nigeria is not a beneficiary of recent IMF debt relief for 25 countries,” she wrote.

“As stated in IMF executive board statement, the relief ‘provides grants to our poorest & most vulnerable members to cover their IMF debt obligations for an initial phase over the next 6 months

“Nigeria is not a beneficiary of IMF debt relief because there is no outstanding debt obligation to be pardoned.

“Since Nigeria is not indebted to the IMF, there is no outstanding debt obligation to be forgiven.

“Nigeria’s application for new IMF financing is under consideration and receiving attention. The new application is for financing under the rapid financing initiative (RFI).”

Rapid financing initiative is a short-term facility that allows governments to address urgent balance of payments needs and support policies that would make it possible to direct funds for priority health expenditures and protect the most vulnerable people and firms.

According to the minister, Nigeria is entitled to access up to 100% of its quota under the rapid financing initiative (RFI).