Vice-President Yemi Osinbajo says a large number of small and medium-sized enterprises (SMEs) in Nigeria collapse due to the payment of multiple taxes.
He said this on Monday in Abuja at the 1st Abuja SME Conference and Exhibition organised by the Abuja Chamber of Commerce and Industry (ACCI).
The event was themed, ‘Solution Strategies for Resolving Tax, Regulatory, Packaging and Logistic Challenges Facing Nigerian SMEs’.
The VP, who was represented by Mariam Katagum, minister of state for industry, trade and investment, noted that the problem of taxation on the growth of SMEs in the country was exacerbated by lack of reliable data for statistical analysis.
According to him, the high rate at which small businesses were shutting down was mainly because of tax-related problems.
“The mortality rates of SMEs are very high, and among the factors responsible for this are tax related issues,” Osinbajo said.
“Some of the specific challenges related to taxation are 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 it was on the above premise that the government, through the Finance Act 2019 and 2020, amended various tax and fiscal legislations to align the Nigerian business environment with global standards.
“One of such amendments is the categorisation of companies into small, medium, and large companies, based on annual gross turnover as seen in the Finance Act 2019,” he added.
“The Act also has as one of its strategic objectives support to small businesses in line with the ease of doing business reforms.”
The VP also said MSMEs in Nigeria had been widely reported to have recorded over 41 million participating enterprises, accounting for about 76 percent of the nation’s labour force and adding about 50 percent to the gross domestic product (GDP).
Osinbajo added that the Presidential Enabling Business Environment Council (PEBEC) would address the thorny issue of multiple taxation which poses challenges to the business environment.
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