The minister of finance, budget and national planning, Mrs. Zainab Ahmed has said that once the Finance Bill 2019 is signed into law, small businesses with less than N25 million profit yearly will be exempted from paying companies income tax.
However, she said those that earn between N25 million and N100 million yearly will now pay 20 per cent as CIT while those that earn over N100 million will continue to pay the 30 per cent.
Currently, all companies are expected to pay 30 per cent of their profit to the federal government as CIT.
“Not only will small businesses be able to do more because they are not paying taxes, we are also working together with the trade authorities to also encourage people in the informal sector to become formalise because they will see other businesses like them that are not registered doing well.
“Their productivity will increase, they will employ more Nigerians, and at the end of the day, they will grow to the level of a medium size business and begin to pay revenue.
“Our assessment is that any business that has a turnover of less than N25 million needs that break, not being taxed so they can invest in their businesses. And we reduced the tax for medium size businesses from 30 per cent to 20 per cent so they can have more resources that they can plough back in their business. These are the largest employers of labour.
“The federal and state governments have a total labour force of less than one per cent of the population.”
Meanwhile, she said the national assembly had already forwarded the bill to President Muhammadu Buhari adding that the president had, in turn, senta copy to the MDAs to cross-check the provisions.
