To encourage more start-ups in Small, Micro and Medium Enterprises (SMMEs), boost the profitability of the existing ones, generate new jobs and make higher contributions to the Gross Domestic Product (GDP), Federal Government is set to reduce the income tax rates payable by SMMEs.
The new incentives are part of recommendations presented to the Minister of Finance, Mrs Kemi Adeosun, by a 12-member committee she set up to review the current National Tax Policy (NTP) in Abuja, on Thursday.
Committee chairman, Professor Abiola Sanni, noted that lowering the taxes payable by SMMEs would encourage compliance, promote the growth of SMMEs and expand the manufacturing base of the nation through their activities.
The committee also recommended abolition of minimum tax, which results in loss making companies being required to pay tax.
Adeosun gave assurance that a team would be set up by the ministry to implement the recommendations of the committee through administrative measures without delay, while those requiring legislations would be forwarded to the Federal Executive Council for consideration.
“We need to deal with legislations that need to be changed. Nigeria cannot afford to be running with antiquated tax laws,” she emphasised.
Earlier in his remarks, the Chairman of the Committee, Professor Abiola Sanni said the report contained some innovations in terms of suggestions, including 20 implementation strategies, explaining that some of the strategies required legislations while others could hit the ground running.
“We believe that at the end of the day, if the recommendations contained in this report are implemented, Nigeria will witness a transformation of the economy as a whole,” he pointed out.