The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) has emphasized that the proposed tax reform bill will eliminate regulatory bottlenecks and significantly boost the growth of micro, small, and medium enterprises (MSMEs) across Nigeria.
Charles Odii, SMEDAN’s Director-General, made the remarks during a stakeholder engagement on tax reforms held in Abuja on Friday.
The event, themed “Understanding the Tax Reform Bills: Benefits and How MSMEs Can Maximize Tax,” aimed to clarify the provisions of the tax reform bill for business owners and industry stakeholders.
During the engagement, Odii highlighted that the bill, once passed into law, would help alleviate the tax burdens faced by small businesses by removing multiple layers of taxation.
“The bill will exempt businesses with annual earnings below N100 million from key tax obligations, including VAT, CIT, PAYE, and several other taxes,” Odii explained. This, he said, would remove significant barriers to business growth and ease the financial pressure on MSMEs, allowing them to reinvest in their operations and expand.
Odii pointed out that there are currently over 39 million MSMEs in Nigeria, and the first step towards ensuring their success is effective sensitization.
Many small business owners are unaware of the tax relief that the reform would bring, and Odii stressed the importance of educating business owners about the forthcoming changes.
“Once this bill is passed, it will simplify the tax process for MSMEs and encourage business formalization,” he added.
By eliminating the fear of excessive taxation, the tax reform will provide a more conducive environment for MSMEs to formalize their businesses, access financing, and expand their operations.
“This reform is a critical step toward supporting business growth, reducing regulatory complexities, and driving the formalization of MSMEs,” Odii stated.
The tax reform bill is expected to play a vital role in encouraging the formalisation of small businesses, many of which currently operate in the informal sector.
The reduction in tax obligations will make it easier for MSMEs to operate legally and access various government incentives and support schemes designed to promote business growth.
The proposed reforms aim to ease the regulatory burden on MSMEs and ensure that small business owners can focus on growth and innovation rather than navigating complex tax regulations.
SMEDAN’s advocacy for the reform underscores its commitment to supporting Nigeria’s small businesses and promoting sustainable economic development.
With the tax reform bill on the horizon, MSMEs in Nigeria are poised to benefit from a more streamlined tax process, allowing them to thrive in a more competitive and transparent business environment.
The passage of the bill could be a game-changer for Nigeria’s economy, unlocking the potential of millions of small businesses and fostering job creation and innovation across the country.
