Government Finance Policies

OVERVIEW OF THE ECONOMIC STABILISATION BILLS Background: The Economic Stabilisation Bills (ESB) which have been approved by the Federal Executive Council contain some recommendations of the Presidential Fiscal Policy and Tax Reforms Committee as part of the Accelerated Stability and Advancement Plan (ASAP) of the government. The ESB seeks to amend about 15 different tax, fiscal, and establishment laws to facilitate economic stability and set the country on the path for sustained inclusive growth. Policy objectives: The proposed changes are designed to achieve the following key objectives: a) Inflation reduction and price stability  b) Complement monetary policy measures with appropriate fiscal interventions to strengthen the naira and sustain exchange rates convergence  c) Promote fiscal discipline and consolidation d) Enhance job creation and poverty alleviation e) Export promotion and diversification Proposed changes: The key changes to be made to the various laws include - 1. Amendments to the income tax laws to facilitate employment opportunities for Nigerians in Nigeria within the global value chain, including the digital economy. 2. Zero rated VAT and improved incentive regime to promote exports in goods, services, and intellectual property. 3. Amendments to facilitate investment in the gas sector and simplify the local content requirements to ensure competitiveness. 4. Reform of the foreign exchange regime to enhance the regulatory powers of the CBN, unlock more forex liquidity, strengthen the naira, and sustain rates convergence. 5. Tax reliefs for private sector employers in respect of wage awards and transport subsidies provided to their employees. 6. Tax relief to companies that generate incremental employment and retain such employees for a minimum of 3 years. 7. Fiscal discipline and enhancement of remittances from government agencies and corporations to the Consolidated Revenue Fund of the federal government. 8. Collaboration with states to suspend certain taxes on small businesses and vulnerable population such as road haulage levies and other charges on transportation of goods; business premises registration; animal trade and produce sales tax; bicycle, truck, canoe, wheelbarrow, and cart fees; shops, kiosks and market taxes and levies. 9. Introduction of “Tax Identification Consolidation and Collaboration (TICC)” initiative to expand the tax base, widen the tax net, and create a level playing field for businesses. 10. Provision of additional funding for the Students Loan Scheme. Next steps: The bills are to be transmitted to the National Assembly for passage into law.

What happens when people receive a basic income of EUR 1,200 per month for three years? 😀 They become more happy 😊 Their mental health improves 👭 They spend more time with friends 😴 They sleep longer and better 💰 They save more 🎁 They give more to others So far so good. But how about work? 👩🏭 They are neither more nor less likely to have a job 🕟 A few – about 3% – switch from fulltime to parttime work 🏫 There's a slight increase in enrolment in education or training – also about 3% These results were obtained in a randomized field experiment in Germany in 2022-2024, see these two recent papers: Sandra B., Susann Fiedler, Maximilian Kasy, Jürgen Schupp, Frederik Schwerter (2025), Cash Transfers, Mental Health and Agency: Evidence from an RCT in Germany, CESifo working paper: https://lnkd.in/e3DTDMGt Sarah Bernhard, Sandra B., Susann Fiedler, Maximilian Kasy, Jürgen Schupp, Frederik Schwerter (2025), Basic Income and Labor Supply: Evidence from an RCT in Germany, CESifo working paper: https://lnkd.in/eae5dKrx The limited effects on work are well in line with another recent randomized field experiment on basic income, conducted in the US by Eva Vivalt et al. (2024): https://lnkd.in/eETQ_-Tg The effects on mental health and well-being are more favorable than found in the experiment in the US: https://lnkd.in/e4NupCK5 The researchers involved in the German experiment argue that this difference may be due to the fact that the basic income in the German experiment was more generous: 🔹EUR 1,200 per month instead of $1,000 per month (in both cases for three years) 🔹paid to single member households rather than to, on average, three member households Apparently, to generate favorable effects on mental health and well-being, the basic income needs to be sufficiently generous. Do these results imply that a generous basic income for all is a desirable public policy? Not necessarily: 🔹 First, a basic income for all must be financed by taxes, which in turn may affect all kind of important outcomes. The experiments discussed above do not shed light on such effects, because the basic incomes were financed through private sponsors (Mein Grundeinkommen e.V. in Germany and Y Combinator Sam Altman in the US). 🔹Second, we need to learn more about the effects of a basic income in other samples (the current samples are people with relatively low income). 🔹Third, we need to take into account possible general equilibrium effects of introducing a generous basic income. 🔹Fourth, a basic income should be contrasted with alternative systems. 🔹Fifth, a basic income may not align with your ideology. However, the favorable effects of a basic income on mental health and well-being found in the new study in Germany should make at least some of us more positive about the idea of a basic income. 😀

Tax policy is evolving rapidly. What did reform look like across countries in 2024?   The OECD’s newly released 𝙏𝙖𝙭 𝙋𝙤𝙡𝙞𝙘𝙮 𝙍𝙚𝙛𝙤𝙧𝙢𝙨 2025 report explores key trends and developments across 86 jurisdictions. This year’s edition highlights a shift away from the broad relief measures introduced during the pandemic and periods of high inflation, towards more targeted forms of tax support.   Across many countries, personal income tax relief was expanded to boost employment and address fiscal pressures linked to ageing populations. Tax policy was also used more actively to support the transition to a low-carbon economy, from carbon pricing and targeted VAT reductions on clean technologies such as solar panels, to corporate tax incentives for sustainable investment.   As inflation eased, temporary reduced VAT rates were phased out and, in some cases, standard VAT rates were increased to strengthen revenues. Several governments also raised health-related excise taxes on tobacco, alcohol and sugar-sweetened beverages, aiming both to generate revenue and promote healthier lifestyles.   📖 Read the full report to learn more: https://oe.cd/tpr25 🗞️ Access the press release: https://oe.cd/6at   #TPR2025 #TaxPolicy #OECD #OECDtax OECD Tax

𝗪𝗵𝗮𝘁 𝘁𝗵𝗲 𝟮𝟬𝟮𝟴–𝟯𝟰 𝗘𝗨 𝗯𝘂𝗱𝗴𝗲𝘁 𝗽𝗿𝗼𝗽𝗼𝘀𝗮𝗹 𝗺𝗲𝗮𝗻𝘀 𝗳𝗼𝗿 𝘁𝗼𝗱𝗮𝘆’𝘀 𝗖𝗼𝗵𝗲𝘀𝗶𝗼𝗻 𝗣𝗼𝗹𝗶𝗰𝘆 The #EuropeanCommission unveiled yesterday its #budget proposal for 2028–2034 (https://lnkd.in/dpjiW8ye). What has been proposed could mark the end of Cohesion Policy as we know it. Beyond the euphemisms —e.g. “Cohesion policy will be strengthened and modernised, with regions at its core”— the reality is much harsher and the implications for the main EU development policy are serious. First and foremost, #Cohesion funding disappears as a stand-alone pot. Regions will compete for resources inside a broader, centrally steered “National & Regional Partnership Plan” that also covers the CAP, migration, defence and climate. Expect heavier Commission oversight and less room for the traditional bottom-up, more transparent multi-annual programmes. What’s at stake here is not just a budgetary tweak; it’s a profound shift in how the #EU governs and how close it remains to its citizens. Cohesion Policy has long been the EU’s most democratic tool. It offers voice and visibility to people living from the richest to the remotest EU #regions. It is one of the very few EU policies that people can see, feel and shape locally. But this is precisely what’s under threat. What is on the table involves: • A new architecture that folds cohesion into a mega-envelope serving multiple EU priorities. • Resources that fall under National Plans —and what is than the point of the EU then?— and can be redirected to geopolitical flashpoints, bypassing long-term development goals. • Funding is increasingly conditional, with results-based payments, reform milestones and the risk of suspension over rule-of-law breaches. • Less funding for basic developed investments. Fundamentally, governance becomes more centralised and opaque. Voice and participation are traded for compliance and control. Overall, the EU brands the proposal as a boost for cohesion, yet the fine print shows a centralised budget in which Cohesion funds are contingent on delivering Union-wide priorities rather than purely regional development goals. Many regions may see their cohesion lifeline diluted or redeployed elsewhere. At a time when one-third of Europeans are voting for Eurosceptic parties, stripping Cohesion Policy of its participatory essence is a dangerous move. The risk of disaffection —as highlighted in the High-level Report on the Future of Cohesion Policy (https://lnkd.in/dcPGKbim) last year— is real and growing. The EU needs a Cohesion Policy that listens, includes and empowers; one that mobilises potential wherever it can be found in Europe, making the EU more competitive. Not one that centralises, conditions, sidelines, and increases the wave of disaffection with EU integration. https://lnkd.in/deDNWxVK

*UK launches consultation with a view to becoming the global hub for green finance* Yesterday, the UK government launched a 12-week, 73 page, consultation entitled "Voluntary Carbon and Nature Markets: Raising Integrity" (link in the comments). This consultation expands on the UK government’s principles for VCNM integrity, launched in November 2024. The government commented: "Currently these markets are not realising their full potential, with a lack of clarity among businesses and organisations on how they can be used, and some poor practice impacting their effectiveness in delivering meaningful climate action and economic growth. In response, the UK is establishing a global framework to build trust and confidence in carbon and nature credit trading, with a set of principles to guide and support businesses on how to use carbon credits that provide environmental benefits. This includes making clear what a good credit is, ensuring they are delivering environmental benefits and encouraging businesses to fully disclose what they are being used for in annual sustainability reporting. These markets are estimated to be worth up to $250 billion by 2050 for carbon markets, and $69 billion for nature markets, under the right conditions." Mark Kenber, Executive Director of VCMI commented: "VCMI welcomes the proposal to recognise our Claims Code as international best practice, as well as the global leadership shown by the UK’s proposal to incentivise greater action by companies to address their unabated Scope 3 emissions through the inclusion of our forthcoming Scope 3 Action Code of Practice. The Code of Practice will enable companies to go further, faster and with integrity on climate action." The 6 integrity principles being consulted on are: 1. Suppliers should ensure credits meet recognised high integrity criteria that ensure credits deliver environmental benefits;  2. Buyers should measure and disclose the planned use of credits as part of sustainability reporting; 3. Users should consider how credits feed into wider transition plans that align with the 1.5°C goal of the Paris Agreement; 4. Claims involving the use of credits should accurately communicate an organisation or product’s overall environmental impact, including by using appropriate and accurate terminology; 5. Market participants should cooperate with others to support the growth of high integrity markets; and 6. Credits should only be used in addition to ambitious climate action within value chains. The consultation: - invites views on the implementation of those six principles; - aims to clarify expected standards for guiding supplier and buyer engagement in VCNMs - invites responses on how these approaches could be reflected in guidance, policy and regulation, supported by market architecture that could embed and scale high-integrity practice. I'll share my perspectives in coming days.

🌍 Rethinking India’s #Tax System: #A Proposal for Fairness and Growth 💡 I recently came across a #thought-provoking post highlighting the stark disparities in India’s #income tax contributions: •#Salaried Individuals: 9 CR revenue, 4 CR in tax. •#Business Revenue: 20 CR revenue, only 80L in tax. •#Agriculture Revenue: 40 CR, 0 tax. •#Political Parties: 7,000 CR, 0 tax. •#IPL Revenue: 12,000 CR, 0 tax. The post ends with a powerful question: “And they ask when is #India’s brain drain going to stop?” It’s a valid concern. When #salaried professionals bear a #heavy tax burden while other sectors with massive revenues #enjoy exemptions, it creates #frustration and drives talent away. As a nation, we need a tax system that’s #fair, #transparent, and incentivizes growth for all. Here’s an alternate tax proposal to address this imbalance and foster a more equitable system: 1️⃣ #Progressive Taxation Across All Sectors:Introduce a progressive tax slab for all income sources—be it #agriculture, #business, or #sports entities like the IPL. For example, agricultural income above a certain threshold (say ₹50 lakh annually) could be taxed at a nominal rate of 5-10%, ensuring small farmers remain #protected while high earners #contribute fairly. 2️⃣ Tax #Political Funding with Transparency:Political parties should be taxed on donations above a certain limit (e.g., ₹1 crore per donor) at a flat rate of 10%. This would encourage transparency in political funding while generating revenue for public welfare. 3️⃣ Incentivize Salaried Taxpayers:Increase the #standard deduction for salaried individuals to ₹1.5 lakh (from the current ₹75,000) and introduce tax credits for #upskilling or #education expenses. This would ease the burden on the middle class and encourage #lifelong learning—key to retaining talent in India. 4️⃣ Tax Exemptions for #Sports with Conditions:Entities like the IPL should contribute a small percentage (e.g., 5%) of their revenue as a “#sports development tax,” which can be reinvested into #grassroots sports programs. This ensures they give back to the ecosystem that fuels their success. 5️⃣ #Simplified Business Taxation:Replace complex tax structures for businesses with a flat 15% tax on #profits, with incentives for reinvesting in #R&D or #job creation. This would encourage entrepreneurship while ensuring a fair contribution to the economy. A fair tax system isn’t just about revenue—it’s about building #trust and ensuring #every sector contributes to India’s growth story. When salaried professionals feel supported rather than #overburdened, and when exemptions are balanced with accountability, we can create an environment where talent thrives, not leaves. What are #your thoughts on this proposal? How can we make India’s tax system more equitable while driving economic growth? Let’s discuss! 💬 #TaxReform #IndiaEconomy #BrainDrain #PolicyMatters #EconomicGrowth

Agricultural subsidies can feed progress – or problems. Each year, countries spend around $630 billion supporting food and agriculture. Nearly 70% of those subsidies are tied to production or inputs like fertilizer, feed, and fuel. The result: staples, dairy, and meat receive the bulk of support, while fruits, vegetables, and pulses, which are essential for healthy diets, are often under-supported or even penalized. These subsidies distort markets, encourage monocultures, exacerbate environmental degradation, and do little to improve nutrition. The challenge isn’t to spend more. It’s to spend smarter. Evidence shows that repurposing these subsidies could: - Lower the cost of healthy diets, especially if financial support is directed to consumers, rather than producers. - Promote diversification toward more nutritious foods and foods with smaller environmental footprints. - Reduce poverty and inequality, when paired with social protection and inclusive financing. Governments also need complementary action, including providing safety nets to protect vulnerable people from shocks and climate and energy policies to cut greenhouse gas emissions. They also need to manage political pressures and competing interests to move forward with reforms. It takes a whole-of-government effort. But it’s possible to align every dollar of agricultural support to advance the goals of nutrition, equity, and sustainability. SOFI 2022 “Repurposing Food and Agricultural Policies to Make Healthy Diets More Affordable” https://lnkd.in/ep9a9EDQ (Photo: Bernd Dittrich on Unsplash)

So the government has announced that they’ll be mandating cash acceptance. This is an announcement of an announcement, so there’s a lot of detail yet to come, but what we know so far is that we’re talking about “essential” goods and services like: ⛽️ fuel 🛒 groceries 🏦 banking 👩⚕️ healthcare 💊 medicine ☎️ utilities They’re also looking to consider exceptions for small businesses. I’ve got a lot of thoughts 💭 👴 This is ostensibly aimed at supporting our elders and vulnerable, and I see it as introducing a floor. What I don’t see is it pushing up the ceiling - improving education and making digital services more accessible could address this issue in a 21st century kinda way. 🛜 The best argument for cash isn’t about people at all, it’s about tech (and what happens when it fails). This hasn’t been referenced as much so far but it’s a good idea to have a payment backup built into infrastructure, especially rural commerce, where water and fuel can quickly become lifelines in Australia. 🌏 Much as I’m for digital payments, can’t help but call out that cash acceptance as a reasonable emergency backup is going to be increasingly important as climate change hits us harder over the coming decades. 📈 Some critics have pointed out that this is disrupting the “beautiful efficiency” of the free hand of the market. I think this alone is a poor critique, because regulation exists to try to reign in adverse effects of these cold calculations, and it should continue to do so. 💰 It is interesting to me that cheques are still on the scrap heap, with the government citing a decline in use of 90% in a decade. I’m for phasing out cheques - but this same stat applies to cash which has similarly plummeted. I suspect it’s because cheques don’t have as loud a brigade of supporters, nor as many interested voters. 😳 Just because cash is to be accepted, don’t expect no adverse outcomes here. For one thing, this is going to confuse the heck out of customers who already don’t understand the ACCC guidance around cash vs card. For another, and where my mind immediately goes, if cash is expensive (it is) and businesses have to offer it, don’t expect them to just absorb this cost… 🔮 I see it as likely that, similar to card surcharge, we see businesses start to calculate the cost of cash and charge end users for cash acceptance. Especially if their supply chain (banks and armoured cars) do the same. If the regulation takes a form which expressly prohibits this, it won’t matter - it’ll simply push up the overall price at checkout. ⚖️ Weirdly, this might build into the discussion around surcharging generally. Could it be entirely outlawed and the cost of payments (in whatever form) incorporated into prices? 👮♂️ On economic crime: I don’t see this as relevant. 94% of businesses already accept cash, and most likely we’re looking at low value consumer transactions, not houses 🏠 and Harley Davidsons 🏍️ Watch this space and follow Luke Raven for more.

In 2012, Canada removed a 142-year-old trading rule. Short sellers launched an attack on mining stocks. It has decimated the mining industry ever since. Here's how: The tick test prevented shorting falling stocks - you could only short on an "uptick." When regulators scrapped it, they also created the Short Market Exempt rule (SME). This lethal combination allows big players to bypass rules everyone else follows. Junior mining stocks became perfect targets with their low volumes and limited capital. Predatory short selling isn't just betting against overvalued stocks. It's deliberately manipulating markets through massive selling pressure. The worst version? "Naked" short selling - selling shares you never borrowed. It's market fraud, plain and simple. Add in "spoofing" (flooding markets with fake orders that vanish when real interest appears) and the game is completely rigged. At Power Metallic, we found over 9 million "phantom shares" in our stock. Industry experts estimate that 30% of a company's float is naked short, effectively counterfeit shares. This destroys junior miners' ability to raise capital. When shorts hammer share prices, companies can't fund exploration. Projects stall. Discoveries never happen. The resource pipeline gets choked. The TSX Venture Mining Index has plummeted despite booming commodity prices. That's why I founded Save Canadian Mining to push for key reforms: • Reinstating the tick test for small-caps • Banning naked shorting completely • Implementing real enforcement Mining titans like Eric Sprott agree: "The regulators should think hard about this... It's stealing from Canadian investors every day." The stakes are enormous - a $107 billion industry that contributes 5% to Canada's GDP and employs 700,000+ people. Junior miners discover deposits that become tomorrow's producing mines. Without them, the entire resource sector will collapse. This isn't just about one company - it's about whether Canada remains a mining leader. It's about protecting investors and ensuring regulators stand for fairness. At Power Metallic, we're fighting on two fronts: We're advancing our Nisk project in Quebec with exceptional grades (8% copper and 22+ g/t PGMs). And we're battling alongside other miners for market integrity. We refuse to let market manipulation distract us from developing Canada's first carbon-neutral PolyMetallic mine. No short attack can change that.