News Investigators/ The Pan-African Alliance of Small and Medium Industries (PAOSMI), says the newly enacted tax laws will stimulate growth of Small and Medium Enterprises (SME) and attract local investment in Nigeria.
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.
Mr 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.
Mr 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 welcome 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,” Mr 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 supported 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.
NAN