The Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), has said the proposed tax reform bill will significantly reduce financial burden and create growth enabling environment for small business owners.

The Director-General of SMEDAN, Mr Charles Odii, said this at a stakeholder engagement on tax reforms organised by the agency on Friday in Abuja.

The News Agency of Nigeria (NAN) reports that the theme of the event was: “Understanding the Tax Reform Bills:Benefits and How MSMEs can maximise Tax”.

Odii said that the bill, when passed into law, would eliminate multiple taxations and exempt businesses earning below N100 million annually from key taxes.

“We have 39,654,385 nano, micro small and medium enterprises (MSMEs)in Nigeria, and the first step towards ensuring their success is sensitisation.

“Many small business owners are unaware that if this tax reform bill is passed, they will no longer be required to pay VAT, CIT, PAYE, and several other taxes,” he said.

According to Odii, the reform is designed to encourage business formalisation and expansion without the fear of excessive taxation.

He also commended the House of Representatives for passing the bill and urged the Senate to follow suit.

“When small businesses flourish, the entire economy benefits. This reform will remove unnecessary regulatory bottlenecks, allowing MSMEs to thrive,” he said.

The President of the Nigeria Association of Small and Medium Enterprises (NASME), Dr Abdulrashid Yerima, also lauded the proposed reforms.

Yerima said that the bill addressed key challenges faced by MSMEs, particularly multiple taxation and arbitrary levies by regulatory agencies.

“Our members have long struggled with excessive taxation at different levels; mport duties, levies on turnover, and arbitrary charges from state and local governments.

“The chairman of the Tax Reform Committee has clarified that many of these burdens will be eliminated once the bill becomes law,” Yerima said.

He further emphasised the need for proper implementation to ensure that non-state actors and unauthorised tax collectors did not continue to impose levies on small businesses.

He said that the reform would promote economic growth by allowing small businesses to reinvest their earnings, scale operations, and create more employment opportunities.

The Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, emphasised the necessity of overhauling the tax system to foster economic growth and alleviate the tax burden on small businesses.

Oyedele reiterated the challenges faced by small business owners, including multiple taxation and exploitation by revenue officers.

He said that many entrepreneurs lacked the resources to navigate complex tax demands, making them vulnerable to undue pressures.

“To address these issues, the committee proposed significant reforms, such as eliminating Value-Added Tax and withholding tax for businesses with annual turnovers below N100 million.

“Additionally, salaries up to N100,000 per month would be exempted from Pay-As-You-Earn (PAYE) tax.

” These measures aim to reduce the administrative burden on small enterprises, allowing them to focus on growth and innovation,”he said.

Oyedele underscored the importance of data-driven policy-making, referencing collaborations with organisations like the Faith Institute to gather credible data on the challenges faced by small businesses.

He said that the strength of a nation was reflected in how it treated its most vulnerable citizens.

He advocated for reforms that provide small businesses with the space to thrive without undue tax pressures.

“These reforms are designed, not merely to generate revenue, but to create a more equitable and supportive environment for small businesses, thereby laying a sustainable foundation for Nigeria’s economic growth and development,” he said.

Earlier, Mrs Linda Omubo-Pepple, SMEDAN’s Director of Partnership and Coordination, said that collaboration between policymakers and business stakeholders was important in shaping Nigeria’s tax policies.

Omubo-Pepple said that tax reforms played a critical role in driving economic growth while ensuring the sustainability of MSMEs.

“As we navigate the tax reforms, it is essential that we foster open dialogue between policymakers and business stakeholders.

“The impact of these reforms will be felt across industries, and this session provides a unique platform to engage, share insights, and collectively address key concerns,” she said.

The meeting, attended by key MSME stakeholders and representatives of the Federal Government, also provided a platform for business owners to ask questions and gain clarity on the provisions of the reform bill.(NAN)