Osinbajo: FG Plans To Buy Locally Assembled Cars

Osinbajo: FG Plans To Buy Locally Assembled Cars

The president, Major General Muhammadu Buhari (retired), said Monday that the federal government proposed in the 2020 finance bill to exempt minimum wage earners.

He said the move was to reduce the impact of inflation on Nigerians, adding that the initiative would exempt wage earners from the minimum wage of the Personal Income Tax.

Buhari revealed this in his virtual speech delivered by Vice President Yemi Osinbajo on Monday at the opening session of the 26th Nigerian Economic Summit Group Conference, on the theme ‘Building Partnerships for Resilience’.

Osinbajo also explained that the federal government would buy cars assembled locally rather than imported from abroad.

He said: “We are proposing in the new Finance Law that those who earn a minimum wage should be exempt from paying income tax.

“These provisions supplementing the tax breaks granted to small businesses last year will not only further stimulate the economy, but are also a fulfillment of promises made to take action to help reduce the cost of transportation and the impact of inflation in ordinary Nigerians “.

The president stated that it was clear that Nigeria must diversify the economy to stop relying on crude oil exports, accelerate human capital development and improve infrastructure.

“Above all, our economy must be more resistant to exogenous shocks,” he said.

Buhari provided information on the collaboration between the Central Bank of Nigeria, the Nigerian Sovereign Wealth Investment Authority, and other stakeholders in creating an Infrastructure Companies Fund to address some of the nation’s critical infrastructure needs.

He said the government was actively working with the CBN, NSIA, and state governments under the auspices of the National Economic Council to design and launch a N15tn Infrastructure Company Fund, which would be independently managed.

“The Infraco Fund will help close the national infrastructure gap and provide a firm foundation for increasing national economic growth and productivity,” the president explained.

Responding to the issue of import tariffs raised at the summit during the speech presentation, the vice president explained that reducing import tariffs on vehicles would help reduce transportation costs.

“The objective of reducing taxes on motor vehicles, commercial vehicles for transportation, is to reduce the cost of transportation by reducing the cost of vehicles,” said Osinbajo.

He added: “With the removal of subsidies and the increase in fuel prices and pass-through to food prices, transportation costs had to be reduced. Now automotive policy is aimed at localizing vehicle production.

“So the logic was to increase tariffs and taxes so that local production becomes more competitive. But the annual demand for vehicles is about 720,000 vehicles per year. Real local production is 14,000 vehicles per year ”.

He noted that the current rate of production would not meet serious national needs and this would mean higher vehicle prices and greater pressure on other sectors of the economy that depend on transport.

However, Osinbajo claimed that the government was not giving up on the local auto industry.

He said: “Two important things to keep in mind; The first is that we still have a relatively high tax of 35 percent; so there is still a disincentive to import ”.

Osinbajo added that the government was also promoting a policy of buying only locally made cars.

Source: – Punch ng