Nigerian economist, accountant, and public policy expert Taiwo Oyedele has revealed that President Bola Ahmed Tinubu has directed the Federal Government to ease the tax burden on small businesses and stop policies that worsen poverty.
Oyedele, who chairs the Presidential Committee on Fiscal Policy and Tax Reforms, made the disclosure during a Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) town hall meeting with artisans and traders in Abuja.
According to him, the President has instructed that all stakeholders must work together to ensure the success of nano, micro, small, and medium-sized enterprises, rather than stifling them with multiple taxes.
“You cannot build a society where businesses are not allowed to breathe,” Oyedele said. “The secret to the success of any society is enabling its 35 million nano, micro, small, and medium businesses to grow. Supporting MSMEs positively is essential because that is the real Nigeria.”
He added that the President has also ordered an end to taxing poverty, capital, and seed, urging instead that government policies should support investment and business growth so that small enterprises can thrive.
READ ALSO: NRS clarifies bank transaction on VAT
“The President directed that we should stop taxing poverty, capital, and seed. We should invest with the people so that the seed can turn into fruit,” he said.Oyedele noted that most businesses in Nigeria operate at the nano level, expressing optimism that many could grow into billion-naira enterprises annually if given the right support.
He also acknowledged growing public concerns about tax reforms, attributing them to misinformation. “There is a lot of negative misinformation about tax reform. Instead of excitement, people are afraid,” he said.
“We understand that some of these accountants and payroll managers may not understand how to do the calculation on this new tax reform, so we are organising a virtual platform to put them through, so far twelve thousand people have registered. If the twelve thousand get it right which I know they will, millions of Nigerian workers will benefit. Before now anything goes, but it is not going to be business as usual”.
He said, under this reform all the categorization apart from high earners in millions will be exempted from corporate income tax, again this is part of the Corporate Affairs Commission and SMEDAN partnership where the CAC is registering small businesses for free, Presently, CAC received five thousand applications everyday for free registration.
“This is one of the deliberate policies of the government to encourage formalization of businesses. Formalization makes your businesses organise as you keep records. If your business is registered with CAC you enjoy a corporate tax rate at zero percent, you will also not pay the 4% development levy.
Whether you are registered with the CAC or not, if your business does not make more than one hundred million naira a year you don’t need to charge VAT, BAT when anyone is paying you, you are not allowed to charge withholding tax or hold on to withholding tax either. Your money must be complete when you are being paid.
Under this new reform tax law, employees are completely exempted from all forms of tax.
For big companies, there is a provision to reduce their corporate tax rate from 30% to 25%. There are companies making more than one billion a year, there is good news for them too, if you pay VAT on business products like manufacturing machines, vehicles, mobile phones including airtime that is used for business, these can be claimed back with receipts.
Speaking the Director General SMEDAN, Charles Odii said, current Small Medium Enterprise right now stand at 39million as President Tinubu earmarked two hundred billion naira for SMEs. It is for them to access it as a single digit business loan. We will keep encouraging our small businesses on production of made in Nigeria.