Abuja, Nov. 25, 2024 – The Tinubu Media Support Group (TMSG)Â says the Tinubu tax reforms will significantly boost businesses in Nigeria.
It said it, therefore, expected the Organised Private Sector (OPS) to rally behind the tax reform actively to champion its passage into law.
The group made this observation in a statement signed by its Chairman Emeka Nwankpa and Secretary Dapo Okubanjo.
TMSG said it was worrisome that the business community was lukewarm in response to reforms that are clearly beneficial to its members.Â
“We note that the Tinubu administration has sent four tax reform bills to the federal legislature with pro-business provisions which are expected to boost production, expand the economy, and unleash fresh productivity.
“For example, in one of the tax bills, there is tax exemption for small companies which are regarded as businesses with annual turnover of N50m or less. The current tax law grants exemptions to companies with yearly turnover of only N25m or less.
“We believe that in a country of millions of people involved in informal businesses, there is a possibility that up to 80% of businesses would benefit from the proposed exemption from paying Company Income Tax (CIT).
“We are therefore jolted that no single umbrella body of business owners in the private sector has publicly spoken on the expected benefits.
“Also in the tax reform bill is a proposed policy that sets out to reduce Company Income Tax rate from 30% to 25% in 2026 for medium and large companies, and those with an annual turnover of over N50m.
“Furthermore, the President Tinubu administration is proposing to eliminate minimum income tax of 1% charged on gross earnings of medium and large companies that did not declare profit. Under the new tax proposal, only profit is to be taxed.
“There is also the harmonisation of 2.5% Education tax, 1% NITDA tax and 0.25% NASENI tax that many firms pay in addition to annual company income tax into a single development levy of 2% that will be deployed exclusively to fund student loans from 2030.
“We dare say that all these spirit lifting initiatives will further reduce the tax burden on many companies operating in Nigeria aside from eliminating what is known as nuisance tax charged in many states.
“We are convinced that these tax exemptions and waivers will free up additional funds in retained earnings for companies to reinvest into their businesses,” it added.
The group is, however, concerned that the business community has been unusually silent on a reform that will relieve their tax burden.
TMSG said: “In the middle of the ongoing public debate on the tax reforms bills introduced by the President Bola Tinubu administration we find it strange that the Organized Private Sector (OPS) had been quite reticent in speaking up.
“This is because the Nigerian business community and its leaders are not known to be quiet whenever the federal government rolls out national policies, especially those that are capable of having some effects on business operations.
“We recall how many of those groups literally took up arms against the Tinubu administration in the wake of the removal of fuel subsidy and the decision to unify multiple exchange rates.
“But now that the same administration has rolled out a tax proposal that is big on tax reliefs and waivers to small and big businesses, we have not seen the usual swiftness to issue press statements or grant interviews in the media.
“We wonder whether they are still processing the proposed tax policies or they are waiting for an invitation from the National Assembly to participate in public hearings which are usually part of the process of passing bills into law.
“But what cannot be disputed is that a tax reform that seeks to increase the threshold of tax exemption for small businesses as well as provide significant reduction in CIT for large companies is one that deserves commendation
It also urged the citizenry to resist any attempt to introduce politics into a tax reform that is largely beneficial to all Nigerians.
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