The Nigerian government has reiterated its dedication towards assisting micro, small, and medium enterprises by implementing tax incentives designed to promote growth and sustainability within this sector.
The government had initially announced an incentive for companies hiring more workers to reduce unemployment in the country. This time, the government wants to create an enabling environment for small businesses to thrive in the country.
As a result, the government has introduced various reforms to reduce the financial burden on these business by exempting them from companies income tax and from the obligation to collect value-added tax.
The head of Nigeria’s tax body, Zach Adedeji noted that the government’s tax policies were designed to support small businesses by reducing the complexity of tax compliance. Also, he noted that the policies will encourage greater participation in the formal economy.
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In addition, the government says it is considering proposals to further raise the threshold for tax exemptions to bring more small businesses into the fold.
As Nigerian businesses grapple with an uncertain economic climate, soaring inflation and high cost of operations, the new tax incentives could be crucial for the survival of businesses.
Also, the tax incentive can help reduce unemployment figures in the country. This is because small businesses account for about 70% of Nigeria’s job creation. Hence, supporting them through tax waivers and other initiative will keep them afloat and encourage them to hire more.
