Osinbajo: Multiple Taxation Killing SMEs

Vice-President Yemi Osinbajo Monday expressed concern over the
high mortality rates of Small and Medium Enterprises (SMEs),
assuring Nigerians however, that the current administration remains
committed to improving the ease of doing business as well as
encourage tax and fiscal responsibility in the country.

The vice-president further lamented the rate at which small
businesses were shutting down due mainly to tax-related issues,
among others.

Osinbajo, at the maiden Abuja SME Conference and Exhibition,
themed: “Solution, Strategies for Resolving Tax, Regulatory,
Packaging and Logistic Challenges Facing Nigerian SMEs”, which was
organised by the Abuja Chamber of Commerce and Industry(ACCI),
added that: “The problem of taxation on the growth of SMEs is
exacerbated by a lack of reliable data for statistical
analyses.”

However, he said that the Presidential Enabling Business
Environment Council (PEBEC) has been doing a lot to address the
thorny issue of multiple taxation which has a debilitating effect
on the business environment.

Represented at the occasion by the Minister of State for
Industry, Trade and Investment, Mrs. Mariam Katagum, the
vice-president specifically pointed out that SMEs faced challenges
of multiple taxation at the national and sub-national levels,
non-clarity on the procedure and amount to pay and non-friendly tax
administrators.

He said the federal government, aware of the constraints
affecting the business landscape, had over the last two years,
through the Finance Act 2019 and 2020, amended various tax and
fiscal legislations to align with the Nigerian business environment
with global standards.

He identified one of such amendments to be the categorisation of
companies into small, medium and large companies, based on annual
gross turnover as seen in the Finance Act 2019, adding that the Act
also has a strategic objectives to support small businesses in line
with the ease of doing business reforms.

Osinbajo said in order for SMEs to sustain their role of
contributing to the mainstream economy, they have to implement
effective strategies in all of their business operations, inclusive
of logistics.

He said the function of logistics is important to SMEs because
it is the quintessence of the organisation’s relationship with
suppliers and customers.

He said though logistics, including high transportation costs,
lack of quality delivery service and lack of quality infrastructure
such as roads constituted major challenges, the President Muhammadu
Buhari-led administration has made massive investments in the
railways, power and road infrastructure all over the country trying
to address the issues.

He further described the theme of the conference as appropriate
and timely, especially with the advent of the African Continental
Free Trade Area Agreement (AfCFTA).

He said: “This is so because there are several African countries
that have the scale to compete with Nigerian businesses in terms of
productive capacity, packaging, exports and logistics.

“Consequently, Nigerian businesses would have to adapt to the
new form of competition on the back of the trade environment
created by the AfCFTA.

“Additionally, Nigerian businesses must learn to position
themselves to take advantage of the new markets that have been
opened to them — a single market of 1.2 billion people and a
cumulative GDP of over $3.4 trillion.”

Describing SMEs as powerful tools for growing emerging economies
such as Nigeria, the vice-president tasked stakeholders at the
gathering to ponder on the challenges confronting the sector and
come up with other practicable approaches that will see SMEs to
excel.

In his remarks, the President of ACCI, Dr. Al-Mujtaba Abubakar,
said the conference was convened to provide answers to the often
repeated challenges facing SMEs in the country.

He pointed out that there are no shortage of analysis and
reviews on problems facing SMEs, adding that: “What is missing is
the creation and implementation of solutions by stakeholders.

“Our goal for this conference is to match problems with
solutions alongside developing an implementation plan.”

Abubakar said the chamber remained one of the foremost advocates
for businesses in Nigeria, particularly in the SME space.

According to him, multiple taxation had been identified as the
principal headache that is killing SMEs and in effect, deepening
unemployment crisis in the country.

He said: “We had proposed a legislation to harmonise taxation
for SMEs. Our detailed submission also seeks a presidential
executive order collating all current incentives for SMEs and
issuing directive for due compliance.

“I want to re-emphasise and strongly recommend that tax
harmonisation legislation should be preceded by a presidential
executive order.

“This will enforce compliance with pro-SMEs initiatives and
interventions of the government.”

Vice-President Yemi Osinbajo Monday expressed concern over the
high mortality rates of Small and Medium Enterprises (SMEs),
assuring Nigerians however, that the current administration remains
committed to improving the ease of doing business as well as
encourage tax and fiscal responsibility in the country.

The vice-president further lamented the rate at which small
businesses were shutting down due mainly to tax-related issues,
among others.

Osinbajo, at the maiden Abuja SME Conference and Exhibition,
themed: “Solution, Strategies for Resolving Tax, Regulatory,
Packaging and Logistic Challenges Facing Nigerian SMEs”, which was
organised by the Abuja Chamber of Commerce and Industry(ACCI),
added that: “The problem of taxation on the growth of SMEs is
exacerbated by a lack of reliable data for statistical
analyses.”

However, he said that the Presidential Enabling Business
Environment Council (PEBEC) has been doing a lot to address the
thorny issue of multiple taxation which has a debilitating effect
on the business environment.

Represented at the occasion by the Minister of State for
Industry, Trade and Investment, Mrs. Mariam Katagum, the
vice-president specifically pointed out that SMEs faced challenges
of multiple taxation at the national and sub-national levels,
non-clarity on the procedure and amount to pay and non-friendly tax
administrators.

He said the federal government, aware of the constraints
affecting the business landscape, had over the last two years,
through the Finance Act 2019 and 2020, amended various tax and
fiscal legislations to align with the Nigerian business environment
with global standards.

He identified one of such amendments to be the categorisation of
companies into small, medium and large companies, based on annual
gross turnover as seen in the Finance Act 2019, adding that the Act
also has a strategic objectives to support small businesses in line
with the ease of doing business reforms.

Osinbajo said in order for SMEs to sustain their role of
contributing to the mainstream economy, they have to implement
effective strategies in all of their business operations, inclusive
of logistics.

He said the function of logistics is important to SMEs because
it is the quintessence of the organisation’s relationship with
suppliers and customers.

He said though logistics, including high transportation costs,
lack of quality delivery service and lack of quality infrastructure
such as roads constituted major challenges, the President Muhammadu
Buhari-led administration has made massive investments in the
railways, power and road infrastructure all over the country trying
to address the issues.

He further described the theme of the conference as appropriate
and timely, especially with the advent of the African Continental
Free Trade Area Agreement (AfCFTA).

He said: “This is so because there are several African countries
that have the scale to compete with Nigerian businesses in terms of
productive capacity, packaging, exports and logistics.

“Consequently, Nigerian businesses would have to adapt to the
new form of competition on the back of the trade environment
created by the AfCFTA.

“Additionally, Nigerian businesses must learn to position
themselves to take advantage of the new markets that have been
opened to them — a single market of 1.2 billion people and a
cumulative GDP of over $3.4 trillion.”

Describing SMEs as powerful tools for growing emerging economies
such as Nigeria, the vice-president tasked stakeholders at the
gathering to ponder on the challenges confronting the sector and
come up with other practicable approaches that will see SMEs to
excel.

In his remarks, the President of ACCI, Dr. Al-Mujtaba Abubakar,
said the conference was convened to provide answers to the often
repeated challenges facing SMEs in the country.

He pointed out that there are no shortage of analysis and
reviews on problems facing SMEs, adding that: “What is missing is
the creation and implementation of solutions by stakeholders.

“Our goal for this conference is to match problems with
solutions alongside developing an implementation plan.”

Abubakar said the chamber remained one of the foremost advocates
for businesses in Nigeria, particularly in the SME space.

According to him, multiple taxation had been identified as the
principal headache that is killing SMEs and in effect, deepening
unemployment crisis in the country.

He said: “We had proposed a legislation to harmonise taxation
for SMEs. Our detailed submission also seeks a presidential
executive order collating all current incentives for SMEs and
issuing directive for due compliance.

“I want to re-emphasise and strongly recommend that tax
harmonisation legislation should be preceded by a presidential
executive order.

“This will enforce compliance with pro-SMEs initiatives and
interventions of the government.”