Vice President Yemi Osinbajo has attributed the high mortality of small and medium enterprises (SMEs) in the country to the lack of reliable data for statistical analyses which leads to multiple taxation of the enterprises.
Speaking at the first Abuja SME conference and exhibition with the theme ‘Solution strategies for resolving tax, regulatory, packaging and logistics challenges facing SMEs in Nigeria’, organised by the Abuja Chamber of Commerce and Industry (ACCI), he assured that the Federal Government was doing a lot to address the thorny issue of multiple taxation through the Presidential Enabling Business Environment Council (PEBEC).
Osinbajo restated the commitment of the President Muhammadu Buhari-led administration to improve the ease of doing business and encourage tax and fiscal responsibility in the country.
“It was on the above premise that government has, over the last two years, 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 categorization of companies into small, medium, and large companies, based on annual gross turnover as seen in the Finance Act 2019. The Act also has as one of its strategic objectives support to small businesses in line with the ease of doing business reforms. However, 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.
Represented by the Minister of State of Industry Trade and Investment, Amb. Mariam Katagum, Osinbajo further said in order for SMEs to sustain their role of contributing to the mainstream economy, they had to implement effective strategies in all of their business operations, including logistics.
“A sub-sector faced with several inhibiting constraints such as poor access to finance, lack of access to local, regional and global markets, lack of access to quality skills, infrastructure, modern technology, lack of access to quality packaging, multiple taxation, logistics bottlenecks among others that have made such impact on our national economy, only goes to reinforce our resolve to deliberately support and optimize the level of competitiveness of our MSMEs sub-sector. It is in that trajectory that the Federal Executive Council approved the revised MSME policy, which was the outcome of a rigorous exercise embarked upon by you, the stakeholders in the MSME ecosystem,” he added.
He explained that the main objective of the policy was to ensure that goods and services emanating from, imported into and traded in Nigeria were designed, manufactured, packaged, labelled and supplied in accordance with the needs, expectations and requirements of the purchaser and consumer, adding the government would continue to explore possible interventions to cushion the effects of the economic downturn especially on small businesses, by providing palliatives to enable recovery, sustenance and improvements under the Economic Sustainability Plan (ESP).
In his address, the ACCI president, Dr. Al-Mujtaba Abubakar, said there was no shortage of analyses and reviews on problems facing SMEs, adding what is missing, however, was the creation and implementation of solutions by stakeholders.
“We have identified multiple taxation as the principal headache that is killing SMEs and in effect, deepening unemployment crisis. We had proposed a legislation to harmonize taxation for SMEs. Our detailed submission also seeks a presidential executive order collating all current incentives for SMEs and issuing directive for due compliance.
“I want to re-emphasis and strongly recommend that tax harmonization legislation should be preceded by a presidential executive order. This will enforce compliance with pro-SMEs initiatives and interventions of the government,” he added.
Earlier, the regional treasurer, Federation of West Africa Chamber of Commerce and Industry (FEWACCI), Otunba Oya, said in recognition of the contribution of SMEs to economic growth, FEWACCI works with ECOWAS, national chambers of commerce, regional and continental institutions to organize programmes and initiatives that promote ease of doing business and capacities to trade and invest across borders.
“FEWACCI has been able to achieve some remarkable results for SMEs. During the pandemic period, FEWACCI engaged in various webinars, virtual meetings with key economic actors in Africa and beyond to devise means and strategies aimed at resuscitating businesses affected by COVID-19. The COVID-19 pandemic further reveals to us the importance of formulating and implementing policies that will be beneficial to SMEs and the role of technology in improving businesses, for this to be realized there should be increased collaborations between the public and private sectors and partnerships among multinational corporations,” he added.
Similarly, the national president, National Association of Chamber of Commerce, Industry, Mines and Agriculture (NACCIMA), Chief John Udeagbala, who described the SMEs as the engine room of every nation, stressed the importance for governments at all levels to pay attention to the needs of the SMEs.
This, he said, would enable them fully harness their potentials as veritable vehicles of inclusive economic growth and development.