It is good news once again this year for Micro Small and Medium scale enterprises(MSME’s) as the minister of finance, budget, and national planning, Zainab Ahmed stated that MSME’s operating in Nigeria that has annual turnover less than N25M will be exempted from paying the statutory company income tax (CIT) in the proposed new finance bill.
She stated this on NTA during an interview and noted that such companies will be exempted from this obligation due to the fact that such companies need the money for reinvestment in their own business for them to grow and survive, rather than paying it as taxes to the federal government.
It will be recalled that some businesses had a lien placed on their bank accounts due to their defaulting in the payment of their company income tax and some other statutory taxes stipulated by the government last year.
What we don’t know yet is whether the proposed finance bill will also exempt the MSME’s from paying the statutory educational levy which is also paid alongside the company income tax (CIT), although this is only 2% of the company profit when compared to the 30% of the profit that goes for the CIT.
This is a welcome development for a country like Nigeria where some businesses could not cope due to statutory tax levies and this will lead to a boost in the economy due to the survival of more businesses.