The Manufacturers Association of Nigeria has expressed concerns over the implementation of certain provisions of the Financial Reporting Council of Nigeria Amendment Act, 2023.
The Director General of MAN, Segun Ajayi-Kadir, made the concerns of the association known in a statement he issued on Monday.
He said the concern was in relation to charges on non-listed entities.
Ajayi-Kadir said that these provisions, as currently implemented, posed significant challenges to the manufacturing companies, majority of whom were non-listed entities.
He noted that these companies under the Act were categorised under: Public Interest Entities.
He said: “For instance, a new section 33 introduced under FRCN Amendment Act, 2023 mandates annual charges for non-listed entities, calculated as a percentage of their annual turnover.
“This is maximum being 0.05 per cent of the annual turnover for companies with turnover of more than N10 billion.
“For publicly quoted companies, the maximum payment earlier was N1 million per annum and that amount is now 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 of whether the company is profitable or not.”
The MAN DG said Section 33 Clause 3 of the FRCN Amendment Act, 2023 imposed heavy penalties on a person or an entity failing to pay annual dues with 10 percent of the annual due for every month of default cumulatively until payment.
Ajayi-Kadir said that the strict penalties and possible conviction to imprisonment could be construed as having the nature of a criminal law.
He noted that generally, non-payment of fees/dues typically results in other penalties or fines, adding that imprisonment provisions are applicable only in cases where non-payment is seen as an act of defiance or fraud.
He said: “Section 34 of the Principle Act stipulates that proceeds of the Fund established under Section 33 of the Act are to be applied for the expenditures of the Council.
“This incentivises excessive generation of revenue and makes collection of the fees purely for administrative purposes.
Also Read
- Cleric explains true meaning of Jihad at NSCDC’s maiden lecture
- Paul Pogba free to return to pitch as doping ban ends
- Sanomi, Kwajafa praise donors as conjoined twins, others get N300m from GIPLC
- Reps order NCC to shut down porn sites nationwide
- New Army formation takes off in Ekiti
“Criminalising non-payment of dues/fees, the utilisation of which is more administrative in nature, makes the FRNC Amendment Act, 2023 a draconian law with no choice left for the entities to contest the charge, but to comply and pay the dues.”
Ajayi-Kadir added that the development was a direct assault on the government’s commitment to ease of doing business.
He said that its implementation at this difficult time for manufacturers and other businesses amounted to yet another form of aggravated tyranny of regulation.
According to him, 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 the same are not halted.
He urged the FRCN to be mindful of the potential negative impact of its continued administration of the fees on businesses and put it on hold.
The MAN DG said: “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.”
Follow The Eagle Online Channel on WhatsApp
