In a bid to promote the Micro, Small and Medium Enterprises, MSMEs, the Federal Government on Tuesday resolved to cut the income tax rate applicable to this sector.
The minister of finance, Kemi Adeosun revealed this during a Coalition of MSMEs stakeholder Public Private Dialogue, (PPD) on Tax and Regulatory policy framework for MSMEs in Lagos.
She said: “The qualification for the lower income tax rate applicable to small businesses should be reviewed in line with current economic realities.
“The Income tax rate for small businesses should be further reduced as an incentive to encourage compliance and promote Micro, Small and Medium Enterprises, MSMEs.
“There should be a minimum threshold for VAT registration and compliance in order to protect Micro, Small and Medium Enterprises in Nigeria.
“Tax authorities should establish administrative framework for amnesty and whistle blowing as part of the strategies for curbing evasion and widening the tax net,” she stated.
The minister who was represented by the Director Technical Service Department, Hajia Larai Shuaibu, also said: “Federal and State Tax authorities should respond promptly to the changing business environment as it affects tax administration and develop a workable framework to meet the tax payer demands in this respect.
“The Ministry of Finance shall work with the Legislature to ensure that the requisite changes tax laws are enacted together with the appropriation act of the same year. This would require the executive to timely present tax laws as executive bill for the timely consideration of the National and state house of assemblies,” she said.
Speaking earlier during his welcome address, the President and Chairman of the Council of Nigerian Association of SME, Mr. Degun Agboade, said that statistical indicators on the potentials of the sector toward job creation, poverty reduction and economic growth have continued to show positive trends and its expected contributions to the country Gross Domestic Product (GDP).
“The need for a conducive operating environment for MSMEs cannot be overemphasized. The current stagnation facing MSMEs resulting from multiple taxation, levies, fees, permits etc should not be overlooked. Adding that, if the taxes log level on them is mitigated the result will be huge and unprecedented,” he said.