‘FG’s tax reforms prioritise local manufacturing, SMEs’ 

•MAN applauds, seeks full implementation

Stories By Yinka Kolawole

The ongoing tax reform process being embarked upon by the federal government is set to prioritise local manufacturers, small and medium-scale enterprises (SMEs), and the most vulnerable in the society.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, stated this at the Fiscal and Monetary Reforms Session of the recently concluded 30th Nigerian Economic Summit in Abuja.

Speaking on the new gazetted withholding tax (WHT), Oyedele said the policies will enable manufacturers and small business operators to grow the economy, thereby increasing tax revenues for the government.

“When we allow industries and manufacturers to grow and thrive, the economy grows, and when this happens, we have more economic activity, which will naturally translate into increased tax revenues.

“We prioritised manufacturers and SMEs in our reforms. Now, there are no taxes on manufacturers anymore.

“When we withhold your income, and you’re borrowing at 35 percent, it means you’re funding the government at 35 percent. How do you grow? We’ve done the same for VAT, this allows their costs to go down.”

He noted that the “Deduction of Tax at Source (Withholding) Regulations, 2024” grants rates reduction and full exemption from withholding tax to small businesses with annual turnover not exceeding N25 million, among other benefits.

Meanwhile, the Manufacturers Association of Nigeria (MAN) has commended the reforms, noting that it would be one of the best tax reviews in Africa, if properly implemented.

Director General of MAN, Segun Ajayi-Kadir, said the setting up of the Presidential Committee on Fiscal Policy and Tax Reforms is one of the high points of the Tinubu administration. 

His words: “The committee has done a good job. The private sector was brought, and MAN is represented in the committee. And there have been several recommendations.

We have entered the implementation aspect, and MAN is still represented at the implementation level.

“We are satisfied with the outcome of the work of that committee so far, because we are part of it, we consulted with our members, we made recommendations. And some of the outcomes of the committee’s work are already being implemented. And if all of the recommendations are implemented, Nigeria will have one of the best tax reviews that you can think of on the continent. It will be fair and just, because those who are poor will pay little or no taxes. The more than 60 number of taxes will be brought down to below 10. We are going to have accountability, with an established office of the ombudsman which will make it easier for everyone.” 

Ajayi-Kadir however added that the President will need greater political courage to implement the recommendations fully because, according to him, the tax reforms will affect the rich more.

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