The call by the finance minister to develop tax systems that support small-and-medium enterprises (SMEs) couldn’t have come at a better time.
It came with complaints about high duties and unfavourable tax regime, plus a myriad of other problems continue. Why should the country care about SMEs? As a major driver of growth, the sector needs significant support to flourish and expand. A strong SME sector will create the much-needed jobs; provide sustainable incomes and innovations that help grow and make the economy vibrant. According to the Private Sector Federation (PSF) figures, the sector contributes over 41 per cent of the private employment. SMEs comprise 98 per cent of the private sector and over 60 per cent of the economy, making them major players in the country’s economy.
Although the government introduced a flat tax regime for SMEs and has put in place facilities to ease taxation of the sector, complaints persist.
This, therefore, calls for other interventions to ease pressure on the sector without necessarily stressing the economy. Is it possible to give SMEs more waivers to support their growth? Can government expand the tax base to cover the gap that would be created by these incentives? Enhancing the capacities of SMEs is also crucial because if operators have the right skills to run businesses more profitably, they will pay taxes without ado.
Of course, the SMEs need not to sit and wait for the Government to do everything without trying to improve their situation. Things like acquiring skills to run businesses profitably can be an individual or group effort (PSF or co-operative training programmes).
Also, paying taxes is every citizen’s obligation. SMEs should also work harder and be more innovative in whatever they do.