It’s easy for a shopkeeper or local entrepreneur to ignore the topic of new tax reforms, thinking it won’t affect them. However, it’s time to pay attention because these reforms have something valuable in store for small businesses.
How The Tax Reforms Will Benefit Small Businesses
According to the tax reform bills, a small business is one with an annual turnover of ₦50 million or less. These business typically have fewer employees compared to large corporations and are independently owned. Some proposals in the tax reform bills are intended to make life easier for small businesses and their owners through the following measures:
No More Company Income Tax
If your small business earns ₦50 million or less a year, you won’t have to pay company income tax anymore. Before, only businesses earning ₦25 million or less enjoyed this benefit.
No Withholding Tax
Small businesses no longer have to worry about withholding tax being taken from their income. This means you’ll get full payment for your work.
Easier Tax Filing
Filing taxes is now simpler. You don’t need to pay for expensive auditors to prepare financial statements. This is highly beneficial for small businesses especially those that don’t have extra money to hire accountants.
Protection from Arbitrary Tax Assessments
The government has set up the Office of the Tax Ombud to protect small businesses. If there’s a tax dispute, it will be settled within 14 days, preventing unfair tax demands or long delays.
No More Roadblocks or Extra Levies
The days of multiple taxes and roadblocks are over. Small businesses can now focus on their operations without worrying about interruptions or random charges from tax officials.
Support for Growth
These reforms make it easier for informal businesses to register and become part of the formal economy. Small business owners can now register their businesses without worrying about heavy taxes, allowing them to get loans and grow.
These changes are a big win for small businesses, helping them succeed and contribute more to Nigeria’s economy.
