What do SMEs need: capital or palliative?


Entrepreneurs in Aba, the commercial hub of Abia State, have asserted clearly that the negative economic impact of the COVID-19 pandemic on small businesses go beyond whatever positive reliefs that the tax discounts/waivers, recently announced by the State Government were intended to achieve.

The Abia State Board of Internal Revenue (BIR) on Monday, July 20, 2020, announced tax reliefs to residents of the state, to mitigate the economic impact of the prevailing Covid-19 pandemic.

Agbara Celestine, acting chairman/chief executive, Abia BIR, stated that small scale Industries/artisans (PAYE and all forms of personal income taxes/direct taxes), who make payment for past 3 years arrears, would enjoy 25 percent waiver/discount for payment from now to end of July, 2020; 20 percent waiver/discount for payments in August, 2020 and 15 percent waiver/discount for payments in September, 2020.

With the tax waiver, Government assumed that small businesses still have capacity to pay taxes now, which could be erroneous, Imo Anasonye, chairman, Nigerian Association of Small Scale Industrialists  (NASSI), Abia State, stated.

He explained that most small businesses have totally lost their operating capitals and therefore need more far-reaching interventions, to resume operations again and thrive.

He suggested that the State Government should give 24-months tax holiday for small businesses and working capital of N1million each, to 1,000 small businesses in the State, which could come inform of grant or cheap loans and channeled, through the SME associations in the State.

He appealed to Abia State Government to also upscale basic infrastructure and ensure an atmosphere conducive for business growth and development, devoid of touting, multiple taxation and other negative activities of government or claimed government agencies/agents.

Darlington Kalu, president general, African Association of Small and Medium Enterprises (AASME), appealed to Governor Ikpeazu, to set aside 15 percent of the total budget of the State, as a pool fund to cushion the effect of COVID-19 on MSME in the State.

He argued that businesses need to be revived, before government and its agencies will collect taxes and levies for economic development.

According o him, “We will not accept the taxes and levies as stated, by the Board of Internal Revenue (BIR), which started in July, 2020, while we are still at the peak of Covid-19 pandemic.

He urged the State Government to shift the implementation of the tax waiver to the first quarter of 2021.

“Moreover, we will demand detailed analysis on how the BIR arrived at the formula”.

This is as he decried the way the BIR staff or agents carryout their tax drive in the State and especially, Aba.

“BIR agents/staff are not civil in the discharge of their duties within Aba, where they harass and intimidate, residents and patrons in the commercial city”, he stated.

“We believe that taxes and levies are government moneys and so professionals with sound mind, should be given the responsibility to collect such taxes and levies for Government and not tout.

For Ken Anyanwu, secretary, Association of Leather and Allied Industrialists of Nigeria (ALAIN), urged Government to relax all tolls in the finished leather cluster to reduce their cost of production.

“Government agents are still coming to the cluster to collect toll, so there is nothing like waiver. We don’t deal directly with BIR. What affects us directly is the toll they collect from us, daily.

“Government collects N200 to N300 on a pair of shoes packaged in the cluster. Though they claim our patrons pay this toll, but at the end of the day, our patrons pass on the levy to us, by pricing down our products to recover the tax they paid.

“For me, the best palliative for us, will be for the State Government to relax some of these tolls imposed on us, daily, or help our members to have access to funds, because without funds, we cannot produce.

“Our people are productive; however, our greatest challenge is lack of funds.

“Government should give us financial assistance. If they are relying on funds from the Federal Government, it is not working in the South-East region”, Anyanwu observed.