• Claim private investors more efficient in project costing, delivery • New VAT to affect the economic viability of vulnerable population
Experts in Nigeria’s financial services sector have said the provisions of the Financial Act 2020, recently signed into law by President Muhammadu Buhari, would significantly benefit the Fast-Moving Consumer Goods (FMCG) space, especially from the perspective of the Micro, Small and Medium Enterprises (MSMEs).
According to the experts, MSMEs with gross revenue of N25million and below are now exempted from paying Company Income Tax (CIT), which is a welcome development, as MSMEs are drivers of any economy especially an emerging market like Nigeria’s.
According to him, the biggest challenges facing the country at the moment is that of infrastructural deficit, as Nigeria still lacks the infrastructure that allows the efficient movement of goods, service, and people in good time, and in decent comfort.
“If you get a private capital investor to come in because he knows that he has limited time to recover his investment, he is more practical in project pricing and more efficient in costing projects and that saves us some leakages.
Also contributing, the Chief Financial Officer, MAX.NG, Guy-Bertrand Njoya, said some provisions of the Financial Act 2020 perpetuate the context of uncertainty and policy by fiat and on the whim.
According to him, it would be very difficult for the government to force out long-term investment in such a context, noting that the changes in the Value Added Tax (VAT), is going to affect the lives and the economic viability of the most vulnerable people in the population.
His words: “I know that there is an extensive list of items of goods that are exempted. For us as a mobility company, the question is: is transportation exempted and what kind of transportation is exempted?”
In a related development, tax experts believe the Finance Act 2020, will encourage more investors and grow Nigeria’s gross domestic product (GDP), while helping small businesses to achieve better mileage in improving the economy since the bulk of the nation’s enterprise lies within this bracket.
Speaking on the Impact of Finance Act 2020 on Nigerian businesses, organised by Ascension Consulting Services in collaboration with Explorers Legal Practitioners, and TESB Management Consultants, themed, “Practical Implications of the Finance Act 2020,” Director, Strategic Communication, Nigeria Investment Promotion Commission (NIPC), Emeka Offor, said the Act would promote more investment in the country.