New tax laws provide reliefs for SMEs – Expert

By Damilare Adeleye

Professor Uche Uwaleke, a Professor of Capital Market Studies at Nasarawa State University has disclosed that the newly signed tax reform laws provide reliefs for Small and Medium Enterprises (SMEs).

Uwaleke made this remarks yesterday at a webinar themed “Tax Reform and the Real Economy: Unpacking the New Reality,” hosted by FirstBank.

The session, featured economists and tax professionals who dissected the evolving framework.

A major highlight of the discussion was the introduction of a universal threshold for small businesses, providing much-needed clarity for entrepreneurs navigating the Nigerian market.

Professor Uche Uwaleke explained that the reforms specifically target small businesses to drive growth.
He noted that firms with an annual turnover below ₦100 million are now exempt from major obligations, including Companies Income Tax and Capital Gains Tax.

Uwaleke further emphasized that this ₦100 million benchmark resolves previous legal discrepancies, ensuring that any profit made by businesses below this turnover level remains untaxed.

Beyond domestic exemptions, the reforms aim to boost capital inflows by addressing foreign earnings.

The former Imo State Commissioner of Finance revealed that income earned abroad and repatriated into Nigeria will no longer be subject to tax.

He described this as a deliberate strategy to attract foreign earnings back into the domestic economy and align Nigeria with international best practices.

Regarding Value Added Tax (VAT), Uwaleke confirmed that the rate remains at 7.5%. However, he highlighted a critical shift in how essential goods are treated.

By moving medical and educational supplies from VAT-exempt to zero-rated, the government now allows businesses to recover input VAT, which was previously an unrecoverable cost.

Uwaleke concluded that these policies should serve as a pull factor, encouraging informal businesses to formalize their operations to benefit from these incentives.

He reminded entrepreneurs that while they may be exempt from payments, they are still required to maintain proper records and file tax returns to remain compliant with the new framework.