Nigeria’s latest Finance Bill that is yet to be signed into Law will when in full force ensure that all the small business owners are being exempted from paying the traditional Company Income Tax.
This great news for the small business entrepreneurs was broken by Zainab Ahmed, the Minister of Finance, Budget and National Planning herself when she passionately stated that the proposed Finance Bill would only have an effect on medium and large scale companies.
She buttresses her point that companies with a turnover of N100 million-plus will have to pay 30% and companies with N25 million to N100 million will pay 20% as their Company Income Tax annually.
In her word, she stressed that “Our assessment is that any business that has a turnover of less than N25m needs that break, not being taxed so they can invest in their businesses…”
She continues that they reduced the tax rate for the medium scale businesses from the initial 30 percent to 20 percent in other for them to have adequate returns and resources to efficiently and effectively plow back into their various business ventures.
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Moreso, Ahmed believes and categorically stated that the medium scale business owners have the most considerable employers of labor. According to her, the total force of both the federal and state governments is not up to a percent of the country’s population. Incredible, isn’t?
In the same vein, in stating the rationale behind the exemption of the small businesses from paying Company Income Tax, the Minister of Finance, Budget and National Planning further maintain that “Not only will small businesses be able to do more because they are not paying taxes, but we are also working together with the trade authorities to also encourage people in the informal sector to become formalize…”
The Federal Government believe that their removal from the Financial Bill will encourage other people to venture into entrepreneur the moment they see and realize that their counterpart that are not formally registered with the government are doing so well.
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Also, the Ahmed believes that influx of people in small scale businesses will add more to r production rate and as such, more Nigerians will be employed at the end of the day and sooner or later, they will eventually grow, develop and metamorphose into the medium-size business level and thus, they’ll start paying revenue.
Meanwhile, since this Finance Bill is yet to be signed in to law, every single company is expected to remit 30% of its generated profits into the Federal Government coffers as its Company Income Tax.
However, Ahmed made it known that the bill has successfully passed through all the necessary stages at that the National Assembly and it had been forwarded to the office of the President for assent.
Premise on the above, the Minister confirmed it that Mr. President had sent out copies of the bill to some other necessary parastatals, Ministries, and Agencies to examine the provisions.