10 Government Policies Every Business Owner Must be Aware of in Nigeria
10 Government Policies Every Business Owner Must be Aware of in Nigeria
We were taught in government class that government is the machinery that runs the state or country. Likewise in business, government is one of the machinery that runs a business. For any business to be successful, we need to consider some factors, which include government policies. Government policies go a long way in determining the growth or stagnation, profit or loss of any business in Nigeria, especially small-scale businesses. The government, as much as it encourages the establishment of both small and large scale business, also have impacts on these businesses, some yield positive outcome while some yield negative outcome. In this post, you will learn about some policies of the government every business owner or entrepreneur must not be ignorant of.
- The cost of running business: the cost of running a business in Nigeria is high, even the cost of establishing. This is why many people with business ideas find it difficult to pursue their dream venture because of cost. This is not only peculiar to small businesses, government policies of high import and export dues also affect big establishments.
- Taxation: just like there are three levels of government, so also there are three levels of taxes affecting businesses. Big companies that operate under the federal government pay their taxes to the federal government, while companies and businesses that operate within the niche of the state pays to their respective state government. Small businesses pay their taxes to their various local governments. For companies that have ties around various states in the country, the branches pay taxes to their respective states. Every Nigerian citizens pay taxes either directly or indirectly. While the direct taxes include taxes that companies, business owners, salary earners, etc. pay. The indirect ones are taxes we pay as a result of goods we consume. A biscuit manufacturing company will calculate its tax and divide per head, then add it to the price of each biscuit it is producing. This is to the end that it makes profit irrespective of the tax allocated. Every business owner should know it is mandatory to pay government tax, not indirect ones, but direct ones . You might land yourself in trouble if the Inland Revenue Service (IRS) or “tax collectors” discovers that your business is evading (avoiding) tax. Tax evasion is a punishable offense under the law!
- Interest rates: government policies also influence interest rates on credits and loans. In Nigeria, the Monetary Policy Committee determine the interest rate. An increase in interest rate equals an increase in the cost of doing business. This could cause two things: the cause of running a business and getting loan becomes higher due to increase in interest rate, and on the path of customers, there is reduction in expenditure, which will lead to decrease in sales for business owners. This interest rates does not affect loans from the government alone, it also affects bank credits and loans.
10 Government Policies Every Business Owner Must be Aware of in Nigeria
- Market environment: yes, government policy also influences market environment. Government fiscal policies include taxation, which could affect market sales. Government could decide to increase tax charges on goods. Of course, this could yield more profit for the government, but it would mean less sales for business owners as decrease in tax sensitive products will be recorded while there will be an increase in demand for non-tax sensitive products. This is because increased taxes lowers consumers’ disposable income available for spending.
- Trade regulations: there are some regulations set up by the government to guide the descent marketing of goods in the country. Although some of them are in favor of business owners while some are not. The essence of trade laws is to promote competition among business without violence. Laws like health inspection carried out at hospitals and restaurants is a government tactic to make sure consumers have the best consumer experience by eating in a healthy environment and receiving care in healthy vicinity. The problem I see with this law by the way is its poor implementation, or perhaps one could say it is not implemented at all, because if it was (well) implemented, many changes ought to have been seen in our restaurants and hospitals ( both public and private). Advice to prospective entrepreneurs: make sure you work to give your customers the best experience, especially when you are venturing into businesses that deal with health. Let go of the “others are doing it syndrome”.
Read Also: 5 Home Businesses That Can Make Millions In A Short Term
6. Trade unions: recognition of trade unions is another policy of the government. The Nigeria Labor Congress ( NLC) is the umbrella union that encompasses all other trade unions in Nigeria. The NLC creates other unions from within it , this is to the end that the rights of every business owners is receive protection.
7. Revenue generation: the government controls revenue generation from every business. This is where sectionalism comes in. Considering that Nigeria is one of the largest producers of oil in the world, preference has been given to the oil sector than any other businesses in Nigeria. The oil sector generates more income but do not pay exorbitant taxes, while other businesses generate lesser income in comparison to oil but still have to pay high taxes. Can anyone fight the government anyways?. Therefore, before I digressed, what I wanted to say briefly is that the government’s policy influences revenue generation in every business.
10 Government Policies Every Business Owner Must be Aware of in Nigeria
8. Growth of SMEs: Small and Medium Enterprises (SMEs) are not visible to the government’s watchful eyes. The government is aware of the contribution of SMEs to the growth of the country, which is why it is putting in place certain media for SMEs to function properly, even though there are some shortcomings, which would not be discussed now
9. Loans: government give out loans to business owners and it also controls who receives the loans. Government loans are primarily meant for small business owners because government see them as “helpful” so in a bid to help them boost their business, they get loans. Government however determines who gets loans among all the applicants and also determine the interest rates on the loans.
10.Truthful advertisement: government strive to ensure that its citizens do not get fake goods. It upholds truthfulness. In advertising your product, be as truthful as you can be, because if you are discovered to have been marketing fake goods, the government might penalize you.
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Call or WhatsApp us now on 081 0563 6015, 080 7635 9735, 08113205312 or send email to dayohub@gmail.com and we will solve any of your business problem.
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10 Government Policies Every Business Owner Must be Aware of in Nigeria
As a vibrant and dynamic country in Africa, Nigeria offers vast opportunities for entrepreneurs and business owners. However, navigating the Nigerian business landscape can be challenging due to its complex regulatory environment and ever-changing policies. To ensure your business’s success, it is crucial to be well-informed about the government policies that directly impact your operations. In this blog post, we will highlight ten key government policies that every business owner must be aware of in Nigeria.
1. Companies and Allied Matters Act (CAMA)
The Companies and Allied Matters Act is the principal law governing the establishment and operation of companies in Nigeria. It outlines the procedures for incorporating a business entity, requirements for registration, share capital, directors’ responsibilities, and annual reporting obligations. Amendments to the CAMA in 2020 have brought about significant changes, including the introduction of single-member companies, reduced filing fees for small companies, and enhanced protection for minority shareholders.
Reference link: You can find the Companies and Allied Matters Act on the website of the Corporate Affairs Commission of Nigeria (CAC). Visit their website at: https://www.cac.gov.ng/
2. Taxation Policies
Nigeria’s tax system is essential for funding public services and driving economic growth. Business owners must be aware of various taxes, including corporate income tax, value-added tax (VAT), withholding tax, and personal income tax. The Federal Inland Revenue Service (FIRS) oversees tax administration, and businesses must comply with tax filing and payment deadlines to avoid penalties.
Reference link: For information on taxation policies in Nigeria, including corporate income tax, value-added tax (VAT), withholding tax, and personal income tax, refer to the Federal Inland Revenue Service (FIRS) website at: https://www.firs.gov.ng/
3. Local Content Policy
The Nigerian government is committed to promoting local participation in various sectors, including oil and gas, manufacturing, and telecommunications. The Local Content Policy ensures that Nigerian businesses and professionals have significant involvement in these sectors, promoting job creation and economic development.
Reference link: The Local Content Policy in Nigeria is implemented by the Nigerian Content Development and Monitoring Board (NCDMB). Information about the policy can be found on their website at: https://www.ncdmb.gov.ng/
4. Nigerian Content Development and Monitoring Board (NCDMB) Regulations
For businesses operating in the oil and gas sector, compliance with the NCDMB regulations is vital. These regulations promote the use of Nigerian goods, services, and personnel in the petroleum industry. Companies seeking contracts in the sector must demonstrate their commitment to utilizing local content in their operations.
Reference link: For specific regulations and guidelines related to the Nigerian Content Development and Monitoring Board, visit their website at: https://www.ncdmb.gov.ng/
5. Industrial Training Fund (ITF) Levy
The ITF Levy is a mandatory contribution by all registered companies in Nigeria. This fund is used to provide training and development opportunities for the Nigerian workforce. Business owners must ensure compliance with the ITF Act and submit the required training plans and reports to the Industrial Training Fund.
Reference link: Information about the Industrial Training Fund (ITF) and its levy can be found on the official ITF website at: https://www.itf.gov.ng/
6. National Health Insurance Scheme (NHIS)
The NHIS was established to provide accessible and affordable healthcare services to Nigerians. Employers with at least ten employees are required to contribute to the NHIS on behalf of their employees. Compliance with NHIS regulations ensures that your workforce has access to healthcare services, promoting their well-being and productivity.
Reference link: To learn more about the National Health Insurance Scheme and its requirements for businesses, visit the NHIS website at: https://www.nhis.gov.ng/
7. Nigerian Export Promotion Council (NEPC) Guidelines
For businesses engaged in export activities, the NEPC plays a crucial role in promoting and facilitating export trade. Business owners must be aware of the guidelines and incentives provided by the NEPC to enhance export competitiveness and expand the reach of Nigerian products in international markets.
Reference link: The Nigerian Export Promotion Council provides information about its guidelines and incentives on their official website at: https://www.nepc.gov.ng/ Reference link: The Nigerian Export Promotion Council provides information about its guidelines and incentives on their official website at: https://www.nepc.gov.ng/
8. Immigration Policies
If your business involves hiring foreign employees or engaging in cross-border operations, understanding Nigeria’s immigration policies is essential. The Nigerian Immigration Service (NIS) regulates the entry, stay, and employment of foreigners in the country. Business owners must comply with work permit and visa requirements to avoid legal issues.
Reference link: The Nigerian Immigration Service (NIS) is responsible for regulating immigration policies. Information on visa requirements and work permits can be found on their website at: https://www.immigration.gov.ng/
9. Investment Incentives and Trade Policies
The Nigerian government offers various investment incentives and trade policies to attract foreign and domestic investors. These incentives may include tax breaks, customs duty exemptions, and repatriation of profits. Staying informed about these policies can significantly benefit businesses looking to invest in Nigeria.
Reference link: For information on investment incentives and trade policies in Nigeria, you can visit the website of the Nigerian Investment Promotion Commission (NIPC) at: https://nipc.gov.ng/
10. Intellectual Property Rights (IPR) Protection
Protecting intellectual property rights is crucial for businesses that rely on innovation and creativity. The Nigerian government provides legal frameworks for trademark registration, patent protection, and copyright enforcement. Business owners must secure their intellectual property to safeguard their ideas and products from infringement.
Reference link: The Nigerian Copyright Commission and the Trademarks, Patents, and Designs Registry are responsible for intellectual property rights protection. You can find relevant information on their respective websites:
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Please note that government policies may be subject to updates and amendments over time, so it is essential to verify the information on the official websites or consult legal and business experts for the most current and accurate details.
Conclusion
Nigeria’s government policies directly impact the operations and success of businesses across various sectors. Being well-informed about these policies is essential for compliance, risk mitigation, and making strategic business decisions. From company registration and taxation to trade incentives and intellectual property protection, each policy plays a crucial role in shaping the business landscape in Nigeria. As a responsible business owner, staying abreast of these policies will not only help you navigate the challenges but also unlock the enormous potential that Nigeria offers for your business’s growth and prosperity.
Hope you enjoy this article?
Share your thoughts in the comment session.
Contact us today for your business consultancy and business advisory services. We can help you fine tune your idea, structure your business, market your business, train your staff, consult on your retirement plan, coach you for financial success. We also write business plan and help with fund raising strategies and Grant applications. We can help you start, grow and expand your business.
Call or WhatsApp us now on 081 0563 6015, 080 7635 9735, 08113205312 or send email to dayohub@gmail.com and we will solve any of your business problem.
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