FG Sets Up Committee To Reduce Tax Burden On SMEs | Independent Newspapers Limited
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FG Sets Up Committee To Reduce Tax Burden On SMEs

FG, Buhari, fed govt, RUFIN, herdsmen
Posted: Aug 12, 2016 at 6:30 am   /   by   /   comments (0)

Isuma Mark

 

Abuja – In order to reduce tax burden on Small and Medium Scale Enterprises (SMEs), the Federal Government has set up a committee to review the national tax policy.

The committee, which was inaugurated by the Minister of Finance, Mrs. Kemi Adeosun, is aimed at improving collections and reducing burden posed on small businesses by double.

According to the terms of reference, the review will also make suggestions on the document to facilitate effective implementation of the policy which was approved four years ago.

According to Adeosun, oil is just 13% of Nigeria’s economy but makes 70% of government revenue.

“Our challenge is to ensure that the other 87% of economic activity makes its own contribution to government revenue,” the minister stated.

She added that “an effective tax system is key to this, Nigeria has one of the lowest tax to GDP ratios in the world at just 5%”.

Since the drastic fall of government revenue due to fall in oil export and prices of the commodity at the international market, tax agencies have intensified efforts to close revenue deficit.

Particularly, the Federal Inland Revenue Service (FIRS) has met almost 70% of its revenue target for 2016, according to series of tweets sent out by Vice President Yemi Osibanjo.

However, blanket increases in taxes sometimes conflicting tax demands and double taxation have driven SMEs under as business owners say their operations have become untenable.

Consequently, Adeosun noted the need for a change of approach, saying there is clearly a pressing need for an overhaul of our tax policy.

“Businesses react to tax policy and we are determined to ensure that ours sends the right message being that Nigeria is open for business and is encouraging businesses with a tax system,” she further noted.

The minister said the review will be a continuous exercise, as a means of evolving with global best practices and keeping with the domestic socio-economic realities.

Members of the committee are Adesina Adebayo, Chartered Institute of Taxation (CITN); Taiwo Oyedele (PWC) and Abiola Sani (University of Lagos).

Others are Olayemi, Director of Tax Policy, FIRS; Ike Udume, Director of Legal, FIRS; N.L Abubakar, Secretary, Joint Tax Board and representatives of the Legal Department of the Federal Ministry of Finance as well as director of technical services.