COVID-19 pandemic threat to SMEs’ survival in Nigeria, says SMEDAN …As operators seek one-year tax holiday
Despite the N50billion special intervention fund created by the Federal Government to cushion the impact of the lockdown occasioned by the COVID-19 pandemic on businesses in Nigeria, the Small and Medium Scale Enterprises SMEs are faced with the threat of total extinction, as many may not survive.
Recall that President Muhammed Buhari had in a recent national broadcast during which he announced the imposition of lockdown in some regions of the country to control the spread of the virus, had also announced a N50billion intervention fund for the SMEs through the Central Bank of Nigeria CBN, among several other incentives and palliatives to cushion the effects of the lockdown.
Meanwhile, some SME operators in the country have call for the implementation of a one-year tax holiday in addition to the N50billion intervention fund and other incentives to enable them remain afloat in the face of current harsh economic conditions,
Director General of the Small and Medium Enterprises Development Agency of Nigeria SMEDAN, Dr. Umar Radda, who spoke in an interview monitored on Channels Television, admitted that the SMEs in the country are under very difficult situation due the outbreak of the virus.
He noted that the pandemic has brought about huge negative impact on the global economy; Nigeria inclusive, which he said, has the highest number of SMEs in Africa, a development that calls for the sustenance of a regime of incentives to keep them afloat.
It was also gathered that over 60 million Nigerians are engaged in one form of SME- related business or the other, through which the country creates over 23 million jobs, which makes the sector a very crucial segment of the economy.
The DG however commended the government for the N50billion special intervention that is expected to bring part of the much needed succour to the SME operators, assuring that the agency would do everything within its powers to monitor the administration of the intervention with a view to ensuring that the desired goals and objectives were achieved.
While reacting to recent reports which alleged that the Federal Inland Revenue Service FIRS has commenced revenue drive among companies operating in the country to collect tax for the month of April, 2020, when the entire nation was on lockdown, the DG disclosed that the agency has already written the FIRS to discontinue with that.
He argued that such revenue drive, especially when the entire economy is struggling under the heavy weight of the coronavirus would be counterproductive and would ultimately defeat the whole essence of the incentives and palliatives being given to these firms by the government.
Meanwhile, some SME operators, who spoke in separate interviews, admitted that it was indeed a very trying time for them, arguing that the government should also as a matter of urgency grant a one-year tax holiday to the SMEs in addition to the existing incentives and palliatives to enable them remain in business.
They argued that most of the SME operators may not want to sack members of staff in order to manage cost as being done by many companies, including banks, arguing that that would prove counterproductive in the long run, as huge sums of funds had been spent training the staffers in a particular line of business.
The World Bank and International Monetary Fund had projected that many economies including those in Africa would slip into recession in the post-COVID-19 era due to the impact of the pandemic, which might have far- reaching negative implications for Nigeria, especially given that the economy, which is the second largest in Africa has been struggling to exit recession since 2016.