Manufacturers oppose new annual charges by FRCN

Manufacturers in Africa’s most populous nation have opposed the implementation of the new annual financial charges by the Financial Reporting Council of Nigeria on private enterprise under the FRCN Act.

In a statement, Segun Ajayi-Kadir, director general of MAN, said that these financial levies, as currently implemented, pose significant challenges to the manufacturing companies, the majority of whom are non-listed entities and are categorised under the current definition of Public Interest Entities (PIEs) of the said Act.

The MAN DG described the levies as “exorbitant,” stressing that non-listed manufacturing firms—predominantly MAN members—have now been reclassified as Public Interest Entities (PIEs), thereby subjecting them to oppressive financial obligations.

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Kadir highlighted a new section introduced in the FRCN Amendment Act, 2023, which mandates annual charges for non-listed entities based on a percentage of their annual turnover. For companies with a turnover exceeding N10 billion, the maximum charge is 0.05 percent of their turnover.

“For publicly quoted companies, the maximum payment earlier was N1 million per annum. Now, that amount is hiked to N25 million! Quite incredibly, for non-listed companies, who were previously excluded, there is no cap and it is linked to the turnover, irrespective if the company is profitable or not,” he said.

According to him, section 33 of the amended Act imposes heavy penalties on a person or an entity failing to pay annual dues with 10 percent of the due for every month of default cumulatively until payment.

Kadir further posits that this is a direct assault on the government’s commitment to ease of doing business.

“Apart from the reservations against its application to private companies; the astronomical increase for listed companies; the excessive charge on non-listed companies turnover, particularly for loss-making companies; the commencement of implementation at this difficult time for manufacturers and other businesses amount to yet another form of aggravated tyranny of regulation.”

“The investments of the productive sector of the economy will be negatively impacted if the continued implementation of this annual charge and the strenuous efforts of FRCN to execute same is not halted.”

MAN therefore implores the FRCN to be mindful of the potential negative impact of its continued administration of the fees on businesses and put it on hold, he said.

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“As the umbrella body for manufacturers in Nigeria, we admonish the FRCN to await the enactments of the tax reform laws and realign its operations with the relevant provisions.”

“The urgent consideration and swift action of government is needed to avert the unpleasant consequences of this annual fee. This will bring relief to anxious and long-suffering manufacturers and other business owners. “

He added that it will boost the country’s commitment to ease of doing and align with the broader objectives of the fiscal policy and tax reforms agenda of President Tinubu.