The Director-General of SMEDAN emphasized the positive impact of tax exemptions for MSMEs under the new reform bill. This initiative is expected to provide vital support for the growth and development of small businesses. The DG highlighted the significance of these exemptions in creating a conducive environment for MSMEs to thrive. By Lucy Ogalue
The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) says the proposed tax reform bill will significantly reduce financial burdens and create an enabling environment for small business owners.
The Director-General of SMEDAN, Mr Charles Odii, said this at a stakeholder engagement on tax reforms organised by the agency on Friday in Abuja.
The News Agency of Nigeria (NAN) reports that the theme was “Understanding the Tax Reform Bills: Benefits and How MSMEs can maximise Tax.”
Odii said that the bill when passed into law, would eliminate multiple taxation and exempt businesses from earning below N100 million annually from key taxes.
“We have 39,654,385 nano, micro, small and medium enterprises (MSMEs) in Nigeria, and the first step towards ensuring their success is sensitisation.
“Many small business owners are unaware that if this tax reform bill is passed, they will no longer be required to pay VAT, CIT, PAYE, and several other taxes,” he said.
According to Odii, the reform is designed to encourage business formalisation and expansion without the fear of excessive taxation.
He also commended the House of Representatives for passing the bill and urged the Senate to follow suit.
“When small businesses flourish, the entire economy benefits. This reform will remove unnecessary regulatory bottlenecks, allowing MSMEs to thrive,” he said.
The President of the Nigeria Association of Small and Medium Enterprises (NASME), Dr Abdulrashid Yerima, also lauded the proposed reforms.
Yerima said the bill addressed key challenges MSMEs face, particularly multiple taxation and arbitrary levies by regulatory agencies.
“Our members have long struggled with excessive taxation at different levels: import duties, levies on turnover, and arbitrary charges from state and local governments.
“The chairman of the Tax Reform Committee has clarified that many of these burdens will be eliminated once the bill becomes law,” Yerima said.
He further emphasised the need for proper implementation to ensure that non-state actors and unauthorised tax collectors did not continue to impose levies on small businesses.
He said the reform would promote economic growth by allowing small businesses to reinvest their earnings, scale operations, and create more employment opportunities.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, emphasised the necessity of overhauling the tax system to foster economic growth and alleviate the tax burden on small businesses.
Oyedele reiterated the challenges faced by small business owners, including multiple taxation and exploitation by revenue officers.
He said many entrepreneurs lacked the resources to navigate complex tax demands, making them vulnerable to undue pressures.
“To address these issues, the committee proposed significant reforms, such as eliminating Value-Added Tax and withholding tax for businesses with annual turnovers below N100 million.
“Additionally, salaries up to N100,000 per month would be exempted from Pay-As-You-Earn (PAYE) tax.
” These measures aim to reduce the administrative burden on small enterprises, allowing them to focus on growth and innovation,” he said.
Oyedele underscored the importance of data-driven policy-making, referencing collaborations with organisations like the Faith Institute to gather credible data on small businesses’ challenges.
He said that the strength of a nation was reflected in how it treated its most vulnerable citizens.
He advocated for reforms providing small businesses the space to thrive without undue tax pressures.
“These reforms are designed, not merely to generate revenue, but to create a more equitable and supportive environment for small businesses, thereby laying a sustainable foundation for Nigeria’s economic growth and development,” he said.
Earlier, Mrs Linda Omubo-Pepple, SMEDAN’s Director of Partnership and Coordination, said collaboration between policymakers and business stakeholders was important in shaping Nigeria’s tax policies.
Omubo-Pepple said that tax reforms played a critical role in driving economic growth while ensuring the sustainability of MSMEs.
“As we navigate the tax reforms, it is essential that we foster open dialogue between policymakers and business stakeholders.
“The impact of these reforms will be felt across industries, and this session provides a unique platform to engage, share insights, and collectively address key concerns,” she said.
The meeting, attended by key MSME stakeholders and representatives of the Federal Government, also provided a platform for business owners to ask questions and gain clarity on the reform bill’s provisions.
