Tax administration in Nigeria comes with its challenge. There is apathy when it comes to tax remittances especially from private organisations, SMEs which forms the bulk of the operations within the economic system of the country.
In 2020 the Federal Inland Revenue Service (FIRS) collected N4.9 trillion in tax revenue. An approximate of 98% of the national tax target of 5.076 trillion set by the Federal Government. The FIRS achieved this feat at a time the economy of the country had series of challenges from the effects of COVID-19 pandemic, the low price of crude oil in the international market and the #EndSars protest that disrupted business activities in the fourth quarter of last year.
While the FIRS and the Federal Government may give themselves kudos for the feat, it should be noted that the adverse effect of the economy as a result of the circumstances and happening in 2020 resulted in the dearth of many businesses. The oil price war and the resultant low oil price regime coupled with the devastating impact of the ovid-19 pandemic affected in no small measure the output and survival of most businesses. This left many Nigerians unemployed while the economy contracted by 6.1%, a situation that led the country into its second recession in five years.
Various industries like aviation, transport, agriculture and many other sectors were affected by the shocks of 2020. It is therefore imperative and of great importance for the government to support small businesses in order to boost the economy.
Nigerians, many have argued, are possibly highest tax payers in the world in view of the fact an average citizen provides for self virtually all infrastructures, like electricity, road, water and health care.
In the thick of the pandemic, the National Assembly came up with the Emergency Economic Stimulus Bill 2020 to provide temporary relief for companies and individuals in order to alleviate the financial consequences of a slowdown in economic activities and to protect the economic status of Nigerians who would be unemployed as a result of the pandemic.
The bill provides that employers in the countries should be entitled to a 50% income tax rebate on the total of the actual amount due or paid as Pay-As-You-Earn (PAYE) under the Persona Income Tax Act (PITA). The bill also provides for import duty waiver on medicines and medical goods and personal protection equipment and related goods needed for the treatment and management of COVID-19 in the country.
It is however unfortunate that while the bill has been forwarded to the Senate for consideration and onward transmission to the President for assent, nothing has been heard about the bill, yet businesses continue to sink as a result of the harsh economic realities in the country.
We therefore call on the government to revisit the bill with the aim of providing incentives for small scale businesses to survive the current recession.
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