NEWS DIGEST – Economic experts on Thursday urged the Federal and State Governments to grant five-year tax holidays to Small and Medium-sized Enterprises (SMEs), to enable them to survive teething problems, the challenging period of infancy and guarantee sustainable growth.
The experts told the News Agency of Nigeria (NAN) in Lagos that the tax holiday was necessary for the growth of SMEs which were the biggest employers of labour in the economy.
Mr Israel Osidipe, Director of Statistics, Manufacturers Association of Nigeria (MAN), said that both the developed and developing countries have put in place some measures to promote SME growth, due to their importance in economic development.
According to him, SMEs must be supported with viable policies to allow them to survive developmental challenges and grow to play their conventional roles of employment and wealth generation.
“The role of SMEs in a national economy cannot be overemphasised as they are crucial to its sustainability and growth.
“As such, both developed and developing countries have put in place some measures to promote the growth of SMEs who are vastly becoming the biggest employer of labour globally.
“Prominent among such measures is the tax holiday, particularly at the infant stage of the SMEs.
“Though there is no universally agreed period for exempting SMEs from paying taxes, a period of five years is widely considered to be enough to enable businesses in this category to be able to survive,’’ he said.
Osidipe commended the government for its continuous effort at strengthening the non-oil export sector, mainly through the Export Expansion Grant (EEG).
He, however, urged for more economic reforms to enhance the capacities of agencies saddled with the responsibilities of facilitating trade in the country, as well as continuous upgrade of port facilities and other infrastructure that would engender the competitiveness of Made in Nigeria goods.
Another expert, Prof. Olukunle Iyanda, former Rector of Ibadan Polytechnic, advised the government to provide facilities which SMEs could occupy without paying exorbitant rents and taxes for a period of at least five years.
This, he said, was because the SMEs offered economic growth as they were not capital intensive but labour intensive and, therefore, employed more persons than any other type of businesses.
In addition, he urged the government to put in adequate efforts to encourage foreign direct investment, to guarantee profitable investment in the country, particularly the SMEs.
“Government should also look into areas of infrastructure and be more supportive of businesses, particularly SMEs, as we are looking for areas of revenue diversification.
“The SMEs are the ones that offer economic growth, as they are not capital intensive but labour intensive,’’ he said.
Iyanda lauded the government’s `Trader Moni’ and school feeding initiatives due to the ripple effect it had on economic growth and stability.
He explained that the school feeding initiative employed the services of caterers and farmers who provided the agricultural produce and those in charge of logistics.
The former Rector urged them to duplicate more of such initiatives in different parts of the country, to record all-round economic growth.
“N10, 000 is a lot of money, especially to someone whose total stock in trade is less than N5, 000.
“Such financial intervention helps the businesses to double up and they are better for it, as they are able to sustain themselves,’’ he said. (NAN)