Business News
Government should create favourable tax policies for SMEs – Tony Elumelu
Nigerian businessman, Tony Elumelu, has advocated the need for the Nigerian Government to provide favourable tax policies for Small and Medium Enterprises.
Nigerian business mogul and Chairman of United Bank for Africa Plc, Tony Elumelu, took to his Twitter page, yesterday, to advocate the need for the Nigerian Government to provide favourable tax policies for Small and Medium Enterprises.
According to Mr. Elumelu, this has become imperative considering the fact that an average Nigerian business owner typically takes up the role of a local government by providing his or her own electricity, water supply, and waste disposal.
1. An average business owner in Nigeria plays the role of a local government; providing his own electricity, borehole & waste disposal. Govt. can make it easier by creating favourable tax policies for SMEs #TOETaxReform #TOEWay pic.twitter.com/lO6Yb89m7x
— Tony O. Elumelu, CON (@TonyOElumelu) April 24, 2019
He continued by saying that the Government should make things easier for entrepreneurs by creating favourable tax policies for Small and Medium Enterprises.
Nigeria pays more tax compared to other countries
He further noted that the average amount of taxes businesses pay in Nigeria is 48, compared to 33 in other Sub-Saharan countries. Meanwhile, in Hong Kong, it’s just 3.
2. The average amount of taxes businesses pay in Nigeria is 48, compared to 33 in other Sub-Saharan countries. In Hong Kong, it's just 3 #TOETaxReform #TOEway pic.twitter.com/IhAPhqiRVs
— Tony O. Elumelu, CON (@TonyOElumelu) April 24, 2019
Nigeria needs more taxation treaties
Still on taxes, Mr Elumelu noted that Nigeria has 14 taxation treaties while a country like South Africa has 79 double taxation treaties.
He continued that Nigeria’s tax to GDP ratio is approximately 6%. Rwanda, which is a much smaller country, has a tax to GDP ratio of about 16%.
4. Nigeria’s tax to GDP ratio is approximately 6%, Rwanda, a much smaller country’s tax to GDP ratio is about 16%. Imagine if we are able to get our tax to GDP ratio to 10%? #TOETaxReform #TOEWay pic.twitter.com/EGRwxoAyLv
— Tony O. Elumelu, CON (@TonyOElumelu) April 24, 2019
Nigerians’ reactions
Some Nigerians reacted to Mr Elumelu’s Twitter thread, with many agreeing with what he said. Some even shared their experiences about the unfavourable things many small businesses owners have to go through in the country.
One of his followers briefly narrated how he provides borehole water, power, and waste disposal for his palm oil mill in Etinan. Now, this is something that the Government is supposed to do. But the small business owner does it himself.
God Bless you for this observations sir..I run a Palm Oil Processing Mill in Etinan,Nigeria. I provide my mill with borehole water,electric and waste disposal. The community uses the water too for free. I am #TEF2018 beneficiary and You are truly a leader.
— Abasiodiong samuel (@Abasiodiong11) April 24, 2019
Another follower opined that the Government run down these small businesses through the amount of tax they charge and still leave them to provide all the basic amenities themselves. This situation often causes some of these small businesses to shut down.
Yes, Government @ all levels only come & reap where they did not sow, by demanding all sorts of taxes. Thereby running most of these SMEs down.
— Isaiah Kanu (@Isaiah_Kanu) April 25, 2019
Someone else also opined that the Nigerian Government is dead and that’s why it cannot provide these basic amenities for its citizens.
Another person also wondered why many small businesses never complain about the situation, despite the outrageous bills they are subjected to pay in the name of taxation.
In spite the outrageous bill, if it is available Nigerians won't complain
— Adewunmi Olugbenga (@catalystgbenga) April 25, 2019
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Best payment gateway platforms to avoid scams in your business
A payment gateway is a technology used to accept and hasten debit or credit card purchases from customers.
Many businesses in Nigeria have adopted the online payment method because it is safe, fast, secure, and convenient. In recent times, fintech startups in Nigeria have developed safer payment channels to help businesses conveniently receive online payments.
What is a payment gateway?
A payment gateway is a technology used by merchants to accept debit or credit card purchases from customers. Integrating a payment gateway into your business is highly beneficial as it offers a more secure transaction process for your customers. It can also expand your customer base exponentially because many people will have access to your business at all times. The payment gateway offers faster transaction processing and customers can avoid the inconvenience of long queues.
In Nigeria, there is a wide range of payment gateways to choose from as a business owner. Before choosing a payment provider, you have to find out what each provider is offering and at what cost. Also, look out for PCI-compliant and SSL certificates in order to avoid security problems.
Here is a list of the top payment gateway providers and what they offer.
Paystack
Paystack is a growth engine for a new generation of innovative, forward-looking organizations operating in Africa. The company makes it easy for businesses to accept secure payments from multiple local and global payment channels, while also providing tools to help you retain existing customers, and acquire new ones.
Onboarding and approval take approximately 30 minutes, Paystack accepts payment in USD, GHC, NGN; and offers a wide range of payment methods like Card, Bank Account, Bank Transfer, USSD, Visa QR, and Mobile Money.
Pricing
- Integrating Paystack is 100% free.
- Paystack charges 1.5% + ₦100 for local transactions and 3.9% + ₦100 for international transactions.
- ₦100 fee is waived for transactions less than ₦2500.
Flutterwave
Flutterwave provides the easiest and most reliable payment solution for businesses anywhere in the world. The company makes it easier for Africans to build global businesses that can make and accept any payment, from anywhere across Africa and beyond.
Onboarding and approval happen immediately. Flutterwave offers a wide range of payment methods like Mastercard, VISA, Bank Account, USSD, Bank Transfer, POS, and Visa QR (for local payments); and Mastercard, VISA, and AMEX (for international payments).
Pricing
- Integrating Flutterwave is free.
- Flutterwave charges 1.4% for local transactions and 3.8% for international transactions.
- Processing fees are capped at a maximum of NGN 2,000.
Remita
Remita is a payment solution that helps individuals and businesses make and receive payments, pay bills, and manage their finances across multiple banks. Remita accepts payment in Naira and USD.
Remita offers a wide range of payment methods including Internet Banking, Debit/Credit Cards, Bank Branch, POS Terminals, Mobile Wallet, Cash Agents, mPOS, Direct Debit, Standing Order, and Electronic Purse.
Pricing
- Setting up Remita for your business is free.
- Remita charges 2% for local transactions and 4% for foreign transactions.
Interswitch Webpay
Interswitch is Nigeria’s leading technology-driven digital payments company, helping to shape the payments ecosystem across the growing e-commerce sector in Africa. Interswitch offers a wide range of payment methods including all Nigerian cards, Verve, MasterCard, and Visa. Onboarding and approval take 1 – 2 weeks approximately.
Pricing
- Interswitch charges a one-time integration fee of N150,000.
- For transactions below N133,333, a fee of 1.5% applies, and N2,000 flat fee for transactions above N133,333.
PayU
PayU is a global payment platform that provides a secure way for individuals and merchants to accept and process online payments without the need for their own websites. PayU offers a variety of payment methods including Mastercard credit and debit cards, Verve, Visa and EFT bank transfer.
Pricing
- PayU has a free setup cost.
- It has a 2% service charge on all transactions.
Voguepay
Voguepay is an online payment gateway that allows businesses to process payments in any currency from customers all around the world. Vogue accepts payments via local and international payment methods including Verve, Visa, Mastercard, Bank Transfer, and Voguepay wallets.
Pricing
- Vogue pay charges N1500 (with Corporate Affairs Commission Certificate) and N2500 (with Government issued Identity cards) for setup.
- Local transactions attract a 1.5% charge, while international transactions attract a 3.8% charge.
- Onboarding and approval to Voguepay take between 1-5 days.
Monnify
Monnify is a payment gateway that allows businesses to seamlessly process payments from customers from multiple payment channels. It provides an easier and faster way for businesses to receive payments from customers on their web and mobile applications.
Monnify accepts payments via USSD, Internet banking, mobile banking app, and all Nigerian debit cards.
Pricing
- Monnify setup fees and maintenance costs are free.
- The fee for account transfers is capped at N500 per transaction or a flat rate of N300 (excluding VAT).
- The card fee is capped at N2000 per transaction.
Adopting a payment gateway for your online business can reduce the risk of fraud and also help you retain your customers. This means that your business is open 24/7 and your customers can shop at any time from the comfort of their homes.
