The Manufacturers Association of Nigeria (MAN) has objected to the Financial Reporting Council of Nigeria’s (FRCN) new financial levies on private enterprises under the revised FRCN Act.
Director-General of MAN, Segun Ajayi-Kadir, cautioned that these levies pose an existential threat to businesses and directly contradict the government’s drive to facilitate ease of doing business.
Ajayi-Kadir 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.
“To illustrate, a newly introduced Section 33 within the FRCN Amendment Act, 2023, mandates annual levies on non-listed entities, computed as a fraction of their annual revenue (capped at 0.05% for firms generating upwards of N10 billion annually).
“For publicly listed corporations, the maximum payable amount was formerly N1 million per annum. This has now skyrocketed to N25 million! Even more disconcerting is that for non-listed companies—previously exempt—there exists no upper limit, and the levy is pegged to their turnover, irrespective of profitability,” the DG remarked, citing Section 33 of the FRCN Act 2023.
Ajayi-Kadir contended that beyond the dire financial implications for manufacturers, the legislation enforces draconian punitive measures, including a monthly penalty of 10% for non-compliance and the prospect of up to six months’ imprisonment for defaulting chief executives.
He condemned the criminalisation of non-payment, arguing that regulatory levies customarily attract fines or administrative sanctions, not custodial sentences.
“The severity of these punitive measures, including potential incarceration, can be perceived as aligning with criminal law. Ordinarily, non-payment of levies incurs pecuniary penalties, while imprisonment is generally reserved for cases involving wilful defiance or fraudulent intent,” he asserted.
MAN cautioned that introducing such levies during this economic turbulence could severely deter investment in Nigeria’s industrial sector.
The association thus implored the FRCN to halt the enforcement of these levies and re-evaluate their compatibility with Nigeria’s ongoing tax reform initiatives.
“MAN, therefore, urges the FRCN to carefully assess the adverse ramifications of persisting with these levies and to place them in abeyance. As the principal advocacy body for Nigerian manufacturers, we exhort the FRCN to await the promulgation of the tax reform legislation and recalibrate its regulatory approach in accordance with the pertinent provisions,” the DG stated.
Ajayi-Kadir underscored that suspending the enforcement of the FRCN’s newly imposed levies would align with the federal government’s overarching fiscal and tax reform agenda, which seeks to streamline regulatory frameworks, consolidate taxation, and stimulate industrial expansion.
