By Dipo Olowookere
Plans by government to effect a 5 percent cut in tax for operators in the Micro, Small and Medium Enterprises (MSMEs) sub-sector of the economy has been faulted by key stakeholders in the sector.
Chairman of the Nigerian Association of Small Scale Industrialists (NASSI), Lagos Chapter, Mr Segun Kuti-George, told Vanguard that a 50 percent reduction would have been a perfect gift to operators in the sector.
However, he commended federal government for the cut, describing it as a welcome development.
According to him, “Nigeria is one of the high-taxing countries in Africa. Hence, any reduction is a welcome development.
“In my opinion, a 50 percent reduction would have encouraged a higher level of compliance among companies in the country.”
On his part, President of National Association of Small and Medium Enterprises (NASME), Mr Degun Agboade, described it “scratching the matter on the surface.”
He said the proposal was the outcome of NASME’s engagement with the National Tax Policy Review Committee constituted by the Minister, pointing out that the 5 percent reduction fell below expectation.
“The action is just scratching the matter on the surface. There is nothing to be excited about on the proposed reduction because it falls far below our expectation.
“Five percent is not what we are asking for. What we want is a special tax and regulatory framework for MSMEs in which MSMEs will not be assessed under personal income tax.
“The impact of the proposed reduction by the government will be minimal if not zero since the bulk of the MSMEs in Nigeria currently operate in the informal sector and most of them are outside the tax net.
“What government should be doing is to encourage all MSMEs register their businesses and are tax compliant, and bring all those that fall within the same category under the same tax regime.
“We are proposing a framework that will bring all businesses under the MSME sub-sector under a common tax umbrella. This should include harmonisation of all taxes, fees and levies.”
Recall that recently, the Minister of Finance, Mrs Kemi Adeosun, announced a proposal to amend the Company Income Tax aimed at reducing the rate of tax on MSMEs from 20 percent to 15 percent.
more recommended stories
FGN Bond Yields Fall to 14.73% as Eurobonds Yields Drop 6.24%
By Dipo Olowookere The average yields.
What Else Would Drive Markets in 2019?
By United Capital Research Beyond election-related.
Naira Loses 0.28% at Parallel Market, Gains 0.02% at I&E
By Dipo Olowookere The value of.
Market Indices Appreciate by 0.81% as Investors Gain N97b
By Dipo Olowookere Sustained bargain hunting.