Stakeholders have urged the federal government to raise the annual turnover threshold for small businesses eligible for exemption from the newly introduced Withholding Tax (WHT) regulation. The current threshold of N25 million is deemed too low by many.
The government recently unveiled the new WHT regulation, which aims to ease the tax burden on small businesses. While stakeholders commend the government for this initiative, they believe that the N25 million threshold is insufficient given the current economic realities.
Dr. Femi Egbesola, President of the Association of Small Business Owners of Nigeria (ASBON), proposed increasing the threshold to N75 million, citing the devaluation of the naira and the prevailing economic conditions.
Dr. Muda Yusuf, Chief Executive Officer of the Centre for the Promotion of Private Enterprise (CPPE), echoed this sentiment, stating that N25 million is too small a threshold for SMEs. He suggested raising it to a minimum of N100 million to have a significant impact on small businesses.
The new WHT regulations, as announced by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, grant rate reductions and full exemption from withholding tax to small businesses with annual turnover not exceeding N25 million. However, stakeholders believe that a higher threshold is necessary to provide adequate relief to small businesses.
While the regulations offer favorable provisions for manufacturers, stakeholders emphasize the need for a more realistic threshold to address the challenges faced by small businesses in today’s economic environment.
