Tax reforms to boost SMEs, local manufacturers, MAN lauds new measures

The federal government’s ongoing tax reform is set to prioritize local manufacturers, small and medium enterprises (SMEs), and vulnerable groups, aiming to create a more favorable business environment.

This was disclosed by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, during the 30th Nigerian Economic Summit in Abuja. The reforms are designed to reduce the tax burden on businesses, enabling them to grow and contribute more effectively to Nigeria’s economy.

Oyedele highlighted that the newly gazetted withholding tax (WHT) regulations would directly benefit manufacturers and small businesses by removing certain tax liabilities.

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This, in turn, would lower operational costs and help businesses scale. “By allowing industries and manufacturers to thrive, we increase economic activity, which will lead to greater tax revenue for the government in the long run,” Oyedele stated. He also emphasized that businesses with an annual turnover below N25 million will enjoy full exemption from withholding tax, further incentivizing growth within the SME sector.

The Manufacturers Association of Nigeria (MAN) has praised the reforms, considering them one of the most significant tax reviews in Africa. Segun Ajayi-Kadir, Director General of MAN, acknowledged the committee’s effort, noting that private sector stakeholders, including MAN, played an active role in shaping the reforms.

He expressed optimism that if fully implemented, the reforms will not only reduce the number of taxes but also ensure a fairer system where the poor pay minimal or no taxes.

Ajayi-Kadir added that political will is key to the successful implementation of these recommendations, as the reforms are expected to impact wealthier individuals more significantly.