Government should create favourable tax policies for SMEs – Tony Elumelu

Nigerian business mogul and Chairman of United Bank for Africa Plc, Tony Elumelu, took to his Twitter page, yesterday, to advocate the need for the Nigerian Government to provide favourable tax policies for Small and Medium Enterprises.

According to Mr. Elumelu, this has become imperative considering the fact that an average Nigerian business owner typically takes up the role of a local government by providing his or her own electricity, water supply, and waste disposal.

1. An average business owner in Nigeria plays the role of a local government; providing his own electricity, borehole & waste disposal. Govt. can make it easier by creating favourable tax policies for SMEs #TOETaxReform #TOEWay pic.twitter.com/lO6Yb89m7x

— Tony O. Elumelu, CON (@TonyOElumelu) April 24, 2019

He continued by saying that the Government should make things easier for entrepreneurs by creating favourable tax policies for Small and Medium Enterprises.

Nigeria pays more tax compared to other countries 

He further noted that the average amount of taxes businesses pay in Nigeria is 48, compared to 33 in other Sub-Saharan countries. Meanwhile, in Hong Kong, it’s just 3.

2. The average amount of taxes businesses pay in Nigeria is 48, compared to 33 in other Sub-Saharan countries. In Hong Kong, it’s just 3 #TOETaxReform #TOEwaypic.twitter.com/IhAPhqiRVs

— Tony O. Elumelu, CON (@TonyOElumelu) April 24, 2019

Nigeria needs more taxation treaties 

Still on taxes, Mr Elumelu noted that Nigeria has 14 taxation treaties while a country like South Africa has 79 double taxation treaties.

He continued that Nigeria’s tax to GDP ratio is approximately 6%. Rwanda, which is a much smaller country, has a tax to GDP ratio of about 16%.

4. Nigeria’s tax to GDP ratio is approximately 6%, Rwanda, a much smaller country’s tax to GDP ratio is about 16%. Imagine if we are able to get our tax to GDP ratio to 10%? #TOETaxReform#TOEWay pic.twitter.com/EGRwxoAyLv

— Tony O. Elumelu, CON (@TonyOElumelu) April 24, 2019

Nigerians’ reactions

Some Nigerians reacted to Mr Elumelu’s Twitter thread, with many agreeing with what he said. Some even shared their experiences about the unfavourable things many small businesses owners have to go through in the country.

One of his followers briefly narrated how he provides borehole water, power, and waste disposal for his palm oil mill in Etinan. Now, this is something that the Government is supposed to do. But the small business owner does it himself.

God Bless you for this observations sir..I run a Palm Oil Processing Mill in Etinan,Nigeria. I provide my mill with borehole water,electric and waste disposal. The community uses the water too for free. I am #TEF2018 beneficiary and You are truly a leader.

— Abasiodiong samuel (@Abasiodiong11) April 24, 2019

Another follower opined that the Government run down these small businesses through the amount of tax they charge and still leave them to provide all the basic amenities themselves. This situation often causes some of these small businesses to shut down.

Yes, Government @ all levels only come & reap where they did not sow, by demanding all sorts of taxes. Thereby running most of these SMEs down.

— Isaiah Kanu (@Isaiah_Kanu) April 25, 2019

Someone else also opined that the Nigerian Government is dead and that’s why it cannot provide these basic amenities for its citizens.

Another person also wondered why many small businesses never complain about the situation, despite the outrageous bills they are subjected to pay in the name of taxation.

In spite the outrageous bill, if it is available Nigerians won’t complain

— Adewunmi Olugbenga (@catalystgbenga) April 25, 2019


Source: Nairametrics

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