The Presidential Enabling Business Environment Council (PEBEC) will address thorny issue of multiple taxation that poses challenges to the business environment.
Vice President Yemi Osinbajo who made this known on Monday in Abuja at the First Abuja Small and Medium Enterprises (SMEs) conference and exhibition 2021 said government was focused on improving Ease of Doing Business and encouraging tax and fiscal responsibility.
The conference, which was organised by the Abuja Chamber of Commerce and Industry (ACCI), was aimed at providing Solution Strategies for Resolving Tax, Regulatory, Packaging and Logistic Challenges Facing Nigerian SMEs.
Osinbajo, represented by Amb. 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 the vice president, the mortality rates of SMEs are very high, and among the factors responsible for this are tax related issues.
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 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.
“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.
In order for SMEs to sustain their role of contributing to the mainstream economy, he said they needed to implement effective strategies in their business operations, inclusive of logistics.
Osinbajo said the function of logistics was important to SMEs because it was the quintessence of the organisation’s relationship with suppliers and customers.
He noted some challenges related to logistics as high transportation costs, lack of quality delivery service and infrastructure.
He said the challenges related to packaging were non-availability of quality materials, high cost of materials and lack of inbuilt culture of packaging.
In order to resolve some of these challenges, he noted specific actions which must be put in place to overcome them.
These include sensitization and awareness creation, general capacity building and streamlining of taxes across the national and sub-national levels.
He listed others as implementation of relevant sections of the Finance Acts, specific technical training on packaging and logistics, sharing of knowledge and peer review with SMEs in other jurisdictions.
He also called for strict observance of international standards, adding that regulatory authorities must develop friendly criteria for SMEs.
Osinbajo noted that the conference was apt in view of African Continental Free Trade Area (AfCFTA) because several African countries have the scale to compete with Nigerian businesses in terms of productive capacity, packaging, exports and logistics.
Consequently, he said SMEs needed to adapt to the competition, created by AfCFTA and position themselves to take advantage of the single market of 1.2 billion people and a cumulative GDP of over 3.4 trillion dollars.
Osinbajo appreciated contributions of MSMEs to Nigeria’s economy, widely reported to have recorded over 41 million participating enterprises, accounting for about 76 per cent of Nation’s labour force and 50 per cent Gross Domestic Product (GDP).
He said that it was against this backdrop that the Federal Government reinvigorated its commitment and interest in repositioning and investing in the sector for efficiency, growth and development.
In an address, Sen. Francis Fadahunsi, Chairman Senate Committee on Trade and Investment, called for presentation of budget to empower SMEs to the National Assembly for consideration towards tackling SMEs challenges.
Fadahunsi advocated that SMEs should also be mobilised and grown from interior villages (Micro Businesses) down to the city, adding that micro business should also be considered while giving Tax holidays status as being done for giant businesses.
“There must be encouragement to establish rural banking for small businesses in the rural areas to grow economically. Policy must be in place to drive micro businesses with government and private sector participation,’’ he noted.