Tax committee proposes major tax exemptions for small businesses

The Presidential Fiscal Policy and Tax Reforms Committee has put forward significant tax relief measures aimed at supporting small businesses in Nigeria.

Taiwo Oyedele, the committee’s chairman, announced during an interview on Channels Television that the proposed changes would notably raise the turnover threshold for tax exemptions.

Under the new proposals, businesses with an annual turnover of N50 million or less will be exempted from a range of taxes, including value-added tax (VAT), withholding tax, and company income tax (CIT).

Currently, only businesses with a turnover of N25 million or less qualify for these exemptions. The adjustment is expected to extend benefits to approximately 97 percent of small businesses across the country, offering substantial relief amid a challenging economic environment.

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“We’ve exempted small businesses from tax—no VAT, no withholding tax, no company income tax,” Oyedele explained.

“The current law covers businesses with a turnover of N25 million, but our new proposals, which we will present to the National Assembly soon, raise this threshold to N50 million.”

In addition to supporting small businesses, the proposed reforms include incentives for private-sector employers. Employers who create more jobs than in previous years will be eligible for tax relief, a measure intended to stimulate job creation and reduce unemployment.

“We’ve developed proposals where the government can provide relief to private-sector employers who offer transportation to their workers. Additionally, employers who increase their workforce beyond the average of the past three years will receive some tax relief,” Oyedele added.

These proposed tax exemptions and incentives form part of the broader fiscal and tax reforms aimed at bolstering the economy and encouraging job creation in Nigeria.