SME Operators Advocate Tax Holidays For Start-up Businesses | Independent Newspapers Limited
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SME Operators Advocate Tax Holidays For Start-up Businesses

Posted: Jun 10, 2015 at 12:30 am   /   by   /   comments (0)

By Ikechi Nzeako –  Lagos 


Some Small and Medium Enterprises (SME) operators in Lagos have urged the Federal Government to institute a five-year tax holiday for start-up businesses in the country.

The operators, who spoke said the exemption would help to fast track and drive the growth of the SME sub-sector’s contribution to the nation’s GDP.

They said that SMEs were the bedrock of economic success and the engine of its growth and contributed immensely to creating job opportunities in the country.

They added that they were also major contributors to employment generation, wealth creation, poverty alleviation and food security.

According to them, payment of taxes by start-up businesses was a burden that has led to the death of many SMEs in the country.

An SME operator, Mrs Jackson Cole, Managing Director, Havannah Enterprises, said, “I believe the government should encourage the growth of start-up businesses by exempting them from taxes in the first few years of their existence.

“Especially, considering the harsh economic climate in the country.

“If new businesses are given this incentive, most of them will thrive and with time, contribute their quota to the nation’s economy through the payment of the necessary taxes.’’

She argued that most new businesses were struggling for survival, recognition, and acceptance, as well as to carve a niche for themselves in the existing competition that has become fierce.

“I believe they do not need the added burden of tax payment,’’ she added.

Another operator, Mr Victor Adegoriola, Director, Thames Food Ltd, said, “It is unacceptable to see tax officers enforcing tax compliance from a woman that is frying bean cakes for survival.

“Whereas, we have a lot of big businesses that are evading tax payment because their Managing Directors are top shots in government. It is unfair’’.

Adegoriola said most SMEs in the country were groaning under the harsh operating business environment.

“No roads, irregular power supply, paucity of funds, insecurity, high cost of production, are just a few of the challenges out there.

“I believe the government should cushion the effects of the challenges experienced in the sub-sector by granting tax waivers to new SMEs in the country.’’

He said granting tax exemption to start-up businesses would help to reduce the country’s increasing unemployment rate.

“A business that is given a conducive environment to operate would definitely flourish, expand and employ more hands in its operation.

“Government alone cannot create employment for its teeming workforce; hence the need to encourage entrepreneurs by creating an enabling business environment to sustain economic development,” he added.

Eke Ubiji, Executive Secretary, Nigerian Association of Small and Medium Enterprises (NASME), stressed that advocacy for tax holidays for start-up businesses in the country was ongoing with the government.

“There is no tax holiday for new businesses in the country. We have been advocating and campaigning for it for a while because its non-existence is negatively affecting our members’ businesses.

“The global practice worldwide is a five-year tax holiday for start-up businesses and I believe it is time for Nigeria to adopt the practice,” Ubiji said.

A recent report by the National Bureau of Statistics (NBS) put the number of SMEs in Nigeria at over 17 million, with a total employment of over 30 million.