Experts affirm new tax regime ‘ll stimulate economic growth, local investments

.As NASME says it ‘ll encourage shift towards inclusive development

…CRFFN urges elimination of tax duplication on freights

 

The Pan-African Alliance of Small and Medium Industries (PAOSMI), says the newly enacted tax laws will stimulate the growth of Small and Medium Enterprises (SME) and attract local investment in Nigeria.

 

 Dr Henry Emejuo, PAOSMI’s Director- General, told the News Agency of Nigeria (NAN) that the laws recently signed by President Bola Tinubu, marked a significant overhaul of Nigeria’s fiscal framework.

 

POASIM’s views on the many benefits of the new tax law tallied with the opinions of other financial technocrats many of who have continued to commend the spirit and intents of the new tax regime which President Bola Ahmed Tinubu signed into law last month.

 

 

Emejuo said it had the potential to simplify the tax system, boost compliance, and improve the business climate for Micro, Small, and Medium Enterprises (MSMEs).

 

He said the new tax regime introduced exemptions and reliefs that would reduce the financial and administrative burdens of small businesses, freeing up capital for reinvestment, business expansion, and job creation.

 

“The exemption of low-income earners and the raising of the tax exemption threshold for small companies from N25 million to N100 million in annual turnovers is a significant relief for many of our members.

 

“These companies are now exempted from Companies Income Tax (CIT), Capital Gains Tax (CGT), and the Development Levy. It is a game-changer,” he said.

 

Emejuo said the move to exempt MSMEs with turnover below N50 million from audited account requirements for tax filing would simplify compliance and reduce operational costs.

 

“The PAOSMI also welcomes the discontinuation of the previous 0.5 per cent turnover tax for companies recording losses.

 

“While a minimum tax is retained, new exemptions have been introduced for small companies, startups, and businesses in primary agriculture.

 

“This is a crucial relief, particularly for early-stage and struggling businesses. It creates space for them to recover and grow, which will ultimately contribute to the country’s economic resilience,” Emejuo said.

 

According to him, the reform has a broader benefit for Nigeria’s business environment, including the consolidation of more than 60 fragmented taxes into fewer than 10.

 

He said the creation of the Nigeria Revenue Service (NRS) as the central federal tax agency was a key step towards addressing this fragmentation and improving tax administration efficiency.

 

“These reforms, if implemented effectively, can significantly enhance Nigeria’s ease of doing business, reduce corruption through digital processes, and provide a more stable investment climate,” he said.

 

The director-general reiterated the new incentives under the law, such as the Economic Development Incentive (EDI).

 

According to him, this allows qualifying companies to claim a five per cent annual tax credit for five years on capital expenditure, replacing the old pioneer status incentive.

 

Emejuo said that such incentives would encourage expansion, innovation and re-investment by local firms, particularly in manufacturing and agriculture.

 

On regional competitiveness, he said Nigeria’s tax reforms brought the country more in line with other African peers such as Ghana and South Africa.

 

“This is in terms of corporate tax rates, VAT structure and tax-to-Gross Domestic Product (GDP) strategies.

 

“Nigeria’s tax-to-GDP ratio, historically low at 13.5 per cent, is projected to rise to 18 per cent by 2026 with improved efficiency and base expansion. That is a realistic and necessary target,” he said.

 

The PAOSMI boss, however, said that the success of the reforms would depend on effective and transparent implementation across all tiers of government.

 

Emejuo recommended sustained public awareness campaigns, the training of tax officials, and improved digital infrastructure to ensure compliance and prevent arbitrary levies.

 

“We urge the government to ensure that tax administrators are well-equipped and that business operators are properly educated on the new tax code.

 

“This is key to unlocking the full benefits of the reforms,” Emejuo said.

 

He reaffirmed PAOSMI’s readiness to work closely with the government and relevant agencies to support implementation and advocate policies that support industrialisation and inclusive growth in Nigeria.

 

NAN reports that PAOSMI is a continental body representing the interests of small and medium-scale manufacturers and service providers across Africa, with a significant membership base in Nigeria.

.As NASME says it ‘ll encourage shift towards inclusive development

 

However, the Nigerian Association of Small and Medium Enterprises (NASMEs), has described the 2025 Tax Act as a signal of the Federal Government’s commitment to inclusive economic growth and enterprise resilience.

Dr Abdulrashid Yerima, the President of NASMEs said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.

Yerima described the tax reforms as a welcome development with cautious optimism, particularly for Micro, Small and Medium Enterprises (MSMEs) across Nigeria and West Africa.

He hailed the exemption of low income earners from tax alongside the upward revision of the turnover threshold for small businesses from N25 million to N100 million.

According to him, this marks a major policy shift towards a more equitable tax system.“This aligns with global best practices in progressive taxation and demonstrates a conscious effort to support income redistribution and stimulate enterprise growth,” Yerima said.

 

He said the adjustment was timely, given the prevailing challenges, including high exchange rates and commercial bank lending rates that exceeded 37 per cent.“This makes it difficult for small businesses to survive,” he added.

Yerima also lauded the removal of the previous 0.5 per cent turnover tax on loss-making businesses, saying it was a positive and corrective move. “The old policy is punitive and counterproductive as it discouraged innovation and threatened startup survival. “This reform shows the government is now more attuned to the realities of Nigeria’s volatile business environment,” he said.

 

He said the new tax law improved Nigeria’s ease of doing business through simpler compliance processes and exemptions that reduced the cost and complexity of tax filing for small firms.

 

“The new tax law represents a shift in philosophy from taxation for revenue extraction to taxation for economic stimulation and inclusive growth,” he said.

 

He emphasised the potential implications for investments, saying the reforms would likely improve investor confidence, especially with the clearer, fairer and more predictable tax regime.

 

“Domestic and foreign investors are more likely to take risks when the tax environment supports innovation, especially for early-stage enterprises.

…CRFFN urges elimination of tax duplication on freights

In another development, the Sea Empowerment and Research Centre (SEREC), has urged the Council for the Regulation of Freight Forwarding in Nigeria (CRFFN) to cancel tax duplication on freights.

The Head Researcher of the Centre, Mr Eugene Nweke, said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.

Nweke said that the cost of doing business in the country was high due to tax duplication, adding that it called for concern.

“There is a need to address too many taxes and charges and duplicated functions.

“This is a major infraction to the regional trans-shipment hub objectives,” he said.

Nweke said that addressing the duplication of taxes would encourage and attract investors and sustain existing businesses in the country.

He said that without the elimination of duplicate taxes, businesses may crumble, especially with the anticipated reintroduction of new charges and levies of four per cent customs operation funding.

Nweke also urged forwarders to support supply chain security through strict implementation of compliance with standard imports.

“Forwarders must shun activities aiding the influx of fake, substandard, pirated, and dangerous imports and exports,” he said.

Nweke urged freight forwarders to uphold their roles in driving the implementation of the African Continental Free Trade Area (AfCFTA) to enhance shipping logistics.

He said that the AfCFTA was a critical tool for the advancement of the shipping industry and would enable the shipment of more vessels to the country and boost the economy.