•Commend FG’s move to ease tax burden on businesses

Stories By Yinka Kolawole

Stakeholders have appealed to the federal government to raise the required annual turnover of small businesses to be granted exemption from the newly introduced Withholding Tax (WHT) regulation to N100 millions, instead of N25 million being offered.

The government has just unveiled a new WHT regulation that grants rate reduction and full exemption to small businesses with annual turnover not exceeding N25 million.

The stakeholders however applauded the government for the new regulation aimed at easing the tax burden on businesses with a view to boosting the manufacturing sector and encouraging investments in the country.

In an exclusive chat with Vanguard, President of the Association of Small Business Owners of Nigeria (ASBON), Dr. Femi Egbesola, said: “It is good news that the withholding tax waiver has finally been gazetted. That indeed provides a ray of hope that better days are ahead for micro, small and medium enterprises (MSMEs). 

“But going by the present realities with the devaluation of the naira and the current economic realities, N25 million turnover is rather too low. N25 million is less than $15,000. 

“We recommend that the turnover benchmark be increased to reflect the prevailing economic situation, perhaps to N75 million.” 

In a similar reaction, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, stated: “The policy on WHT as it affects small businesses is a very good one, we should commend it. But the government needs to increase the threshold.

“Given the current economic situation, particularly inflation, N25 million turnover is extremely small. This can only address the concerns of micro enterprises. If we are talking about small and medium enterprises (SMEs), we should expand the threshold to a minimum of about N100 million. That is what will have an impact on small businesses. 

“N25 million is too small, even the amala sellers these days can give you a turnover of N25 million in a year. This is turnover in a year, this is not profit. It’s too small, given the cost of things today.

“And I must also commend the new WHT regulation for manufacturers. That, I think, will also bring a lot of relief to those of them that are producing and using locally sourced raw materials.

“There are some favourable provisions for manufacturers generally, which we must commend.”

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, last week, announced the “Deduction of Tax at Source (Withholding) Regulations, 2024”.

Expatiating on this, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, said that the WHT regulations, which has been officially published as a gazette, grant rates reduction and full exemption from withholding tax to small businesses with annual turnover not exceeding N25 million.