The Federal Government (FG) has disclosed its plans to prioritise Small and Medium-scale Enterprises (SMEs) in the agriculture, construction and automotive industries by providing tax incentives for them.
The disclosure was made by the Minister of Industry, Trade and Investment, Niyi Adebayo, during a private equity summit in Lagos, recently.
The minister said the ministry had started work on delivering tax and regulatory incentives for SMEs. He also said the government was modernising bilateral investment agreements with a greater sense of purpose through the Nigerian Investment Promotion Commission.
The minister said the government aimed to enhance the ease of doing business and support the growth of SMEs. This, he said, would attract global investors when viewed against the backdrop of the country’s capacity for growth. “The Federal Government seeks to localize at least 40% of its expenditure on stipulated goods and services to facilitate local markets access for Nigeria-made products. “The government also seeks a comprehensive approach in mobilising capital, incentivising priority sectors and expanding market access for local producers,” Adebayo said.
Meanwhile, the acting Director-General of the Securities and Exchange Commission (SEC), Mary Uduk, has described private equity firms as important agents of business and economic growth as they bring capital to the business.
Uduk stressed the fact that Nigeria has a lot of start-ups with genuine robust business plans as well as public companies with solid customer bases, proven products, and high-quality management.
“I see an improved investment climate, friendly market rules, and regulations, as well as increased investor education as essential elements for attracting private equity investments in Nigeria. Towards this, the commission is working on rules and regulations to ease the participation of more private equity funds,” Uduk said.
Recall that a key feature of the new Finance Act law is the introduction of a graduated tax scale for small businesses. Under the law, small companies (with gross turnovers of not more than N25 million) will pay 0% in Companies Income Tax (CIT). They will also not be required to make VAT returns with respect to goods and services rendered.