The Manufacturers Association of Nigeria (MAN) has called on the Financial Reporting Council of Nigeria (FRCN) to reconsider the implementation of annual turnover fees for private companies.
Segun Ajayi-Kadir, the Director-General of MAN, highlighted the potential negative impact these fees could have on manufacturing firms, particularly those that are classified as non-listed entities, and urged the FRCN to delay their enforcement until tax reform laws are enacted.
The recently introduced section 33 of the FRCN Amendment Act of 2023 mandates that non-listed companies must pay an annual fee based on a percentage of their turnover, with the maximum charge set at 0.05% for companies exceeding N10 billion in revenue. In contrast, the fee for publicly listed companies has surged from N1 million to N25 million.
Ajayi-Kadir pointed out that this shift places an undue burden on non-listed firms, many of which may struggle to meet these fees, especially during economically tough times.
The Act imposes severe penalties for non-compliance, including a monthly fine of 10% on overdue fees and the possibility of imprisonment for chief executive officers in cases of default.
These criminal implications raise concerns about the broader consequences of the law.
Ajayi-Kadir emphasized that such stringent measures contradict the government’s efforts to foster a supportive business environment and could deter investment in the manufacturing sector.
The association has urged the government to act promptly to alleviate the pressures on manufacturers and business owners, aligning with fiscal policies and tax reforms that aim to streamline regulations and promote growth in Nigeria’s economy.