Business
US Congress Considers Tax Breaks On Equipment Purchases
There’s a chance tax breaks, which include the research and development credit and a deduction that lets businesses accelerate depreciation on their equipment purchases, will eventually get extended for 2012 and be made retroactive to January 1.
But that may not happen until the end of the year, when Congress engages in what’s likely to be an epic fight over extending the Bush tax cuts and cutting spending.
Meanwhile, businesses are left wondering whether to go ahead and buy equipment without knowing whether a tax break will be made available later.
“Businesses need certainty and predictability. Retroactive tax policy simply does not achieve this goal,” Caroline Harris, chief tax counsel of the U.S. Chamber of Commerce, told the Senate Finance Committee last month.
For one thing, “it takes a lot of the effectiveness out of these incentives,” said Clint Stretch, managing principal of federal tax policy at Deloitte Tax.
Businesses’ willingness to finance projects or their ability to convince financing partners to take a risk on those projects may be compromised if they worry that a host of expired energy credits — not all of which have bipartisan support — won’t be extended for 2012, Stretch said.
The R&D credit is a different story. Unlike the energy credits, it does have solid bipartisan support and most expect it will be renewed. So businesses are likely to act as if it has been. “But they won’t feel good about it,” Stretch said.
That’s because their quarterly financial statements can’t reflect the benefit of the R&D credit before it’s extended. So those statements will look worse than they actually are until Congress extends the break.
The uncertainty factor that surrounds the business tax extenders is amplified this year since Congress is actively talking about tax reform. A key part of reform — which few expect to happen before 2014 – will be deciding which of the temporary tax breaks to make permanent and which to jettison for good.
Ultimately, though, that could work to the advantage of businesses and the economy, since companies will have more certainty than they do now about what they can expect in the tax code from year to year.
That’s the theory anyway.
In the meantime, the road to achieving that certainty is likely to be a bumpy ride.
Credit to Nigeria’s private sector rose to N83.26 trillion in June 2026 from N81.04 trillion in May, signifying a positive balance of N2.22 trillion month-on-month.
Year-on-year, the figure represents a nine per cent increase compared with the N76.13 trillion recorded in June 2025. The latest figures come as the CBN continues to balance efforts to control inflation with the need to support economic growth and expand credit to businesses.
The CBN data shows that credit to Nigeria’s private sector increased by approximately 2.74 per cent month-on-month between May and June 2026. Also, the CBN data noted that credit to the government fell slightly to N40.03 trillion from N40.38 trillion. Other assets, net, dropped to N10.76 trillion from N12.63 trillion.
The credit surge signifies sustained growth in lending to businesses and other private-sector borrowers during the month. The rise in private sector credit was recorded alongside an increase in net domestic credit, despite declines in credit to government and other assets.
Further analysis of the report says that compared with June 2025, private sector credit rose by about N7.13 trillion yea-on-year but net domestic credit increased by approximately N1.87 trillion during the month.
The CBN’s relatively tight monetary policy stance notwithstanding, more banks still loaded funds to the private sector within the period. The Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN) held its 306th meeting on July 20 and 21.
The Committee reviewed recent developments in the global and domestic economies, assessed emerging risks to the outlook and considered their implications for monetary policy and retained all rates.
The Committee decided to retain the Monetary Policy Rate at 26.5 per cent; the Standing Facilities Corridor around the MPR at +50/-450 basis points and retain the Cash Reserve Requirement (CRR) for Deposit Money Banks at 45.00 per cent, Merchant Banks at 16.00 per cent, and non-TSA public sector deposits at 75.00 per cent.
The MPC decision means that credit extension in the private sector will likely continue to rise because of rising confidence in the sector and calls by stakeholders for banks to invest in the private scetor instead of government securities.
