Taiwo Oyedele, chairman of the presidential fiscal policy and tax reforms committee, says the committee has proposed significant tax exemptions for small businesses in Nigeria.
Speaking in an interview on Channels Television, on Monday, Oyedele detailed the government’s commitment to supporting small businesses by raising the turnover threshold for tax exemptions.
Under the new proposals, Oyedele said businesses with an annual turnover of N50 million or less will be exempted from various taxes, including value-added tax (VAT), withholding tax, and company income tax (CIT).
Currently, small businesses with a turnover of N25 million or less benefit from these tax exemptions, but the proposed changes will extend the threshold to N50 million, according to the economist.
This adjustment, according to Oyedele, is expected to cover 97 percent of small businesses in Nigeria, providing much-needed relief for entrepreneurs struggling to stay afloat in a challenging economic climate.
“We’ve exempted small businesses from tax, from those withholding taxes, no VAT, almost all the taxes, no VAT, no withholding tax, no companies income tax,” he said.
“So the context of the law we have, as we speak now, is N25 million turnover a year.
“But in our proposals, the laws we are passing to the National Assembly in the next few days or weeks, we’ve proposed that to go up to N50 million.
“So if your turnover is 50 million or less, then you don’t have to worry about all these taxes, and that, from our analysis, will cover around 97 percent of small businesses.”
Oyedele said the exemptions, which form part of the broader fiscal and tax reforms, also include incentives for private-sector employers.
He also said employers who create more jobs than they have in previous years will be eligible for tax relief, which the government hopes will stimulate job creation and reduce unemployment.
“We’ve also developed some proposals where government can give relief to private sector employers who provide transportation relief to their workers,” he said.
“Also, we’ve had a proposal around more employment, so if an employer employs more people than they would normally do, maybe average of past three years. It gets some relief.”
Oyedele said it is meant to stimulate employment generation.
