FG Plans New Tax Incentives for MSMEs
The Minister of Finance, Budget and Planning, Mrs. Zainab Ahmed, on Monday hinted of fiscal plans by the Federal Government, in form of tax incentives that will enable Micro, Small and Medium Enterprises (MSMES) in the country to minimize operational costs, make profits and contribute to the nation’s economic growth.
Ahmed, who revealed this while briefing the media and other economic stakeholders on the detailed provisions of the 2020 Appropriation Bill , also explained how government’s targets for revenue, improved capital budget performance would be achieved in the fiscal year.
She said to ensure that sustainable revenue generation is achieved, including the revenue projections in the 2020 budget, the present administration intends to build a sustainable revenue generation ecosystem by ensuring resilient and optimal performance streams whilst applying the right incentives, safeguards, accountability and performance managerial systems.
According to her improving the nation’s revenue base and its ratio to the GDP would be achieved by implementing new taxes, broadening the tax base, plugging leakages in public finance and supporting strategic investments that will spur economic growth.
“ Although we are constrained to increase budgetary provisions due to the challenges of the fiscal space, the FIRS continues to work to get more tax paid to increase our tax to GDP ratio, what we are doing also is to make sure that enforcement is enhanced and people and companies that are not in the tax net are captured in the tax net.
“In the Finance Bill, we have an incentive by reduction of taxes for MSMEs to encourage them to come into the tax net and to actually paying taxes. There are some corrections we are making in the tax laws relating to, for example, the insurance industry and dividends relating to the oil and gas industry to encourage the payment of taxes and enhance compliance”, she said.
The minister also spoke on sundry measures being considered by the government to improve the operating environment for businesses and solicited all stakeholders’ support on the renewed drive by government to raise tax revenue, saying the accruals would be judiciously utilized for benefits of the citizenry.