The Federal Government plans to reduce the income tax being payed by Small, Micro and Medium Enterprises (SMMEs) in the country to encourage more start-ups in the sector. A statement by the Federal Ministry of Finance on Thursday said the gesture was also to boost profitability of existing ones, generate new jobs and make higher contribution to Gross Domestic Product (GDP). The ministry said that the new incentives for SMMEs were part of the recommendations presented to the Minister of Finance, Mrs. Kemi Adeosun, by the 12-member committee she established. The committee, chaired by Prof. Abiola Sanni, was to review the current National Tax Policy (NTP).
The Committee noted that lowering the taxes payable by Small, Micro and Medium Enterprises would encourage compliance, promote the growth of SMMEs and expand their manufacturing base. Another recommendation suggested for implementation relates to the abolition of minimum tax which results in loss making companies being required to pay tax. The minister assured that a team would be set up by the ministry to implement the recommendations of the committee through administrative measures without delay.
The minister said those that required legislations would be forwarded to the Federal Executive Council for consideration.
“We need to deal with legislations that need to be changed. Nigeria cannot afford to be running with antiquated tax laws,” she was quoted as saying.
The statement said that a new tax policy had also recommended the enactment of a number of legislation amendments.
The Chairman of the Committee, Professor Abiola Sanni said that the report contained some innovations in terms of suggestions, including 20 implementation strategies.
He said that some of the strategies required legislations while others could hit the ground running.
“We believe that at the end of the day if the recommendations contained in this report are implemented, Nigeria will witness a transformation of the economy as a whole,” he said.