Business

MAN Raises Concerns About Astronomical Charges Imposed By Financial Reporting Council on Private Companies

For publicly quoted companies, the maximum payment earlier was N1 million per annum. Now, that amount is hiked to N25 million.

Published

6 months ago

March 10, 2025

OCHEFA

137 Views

The Manufacturers Association of Nigeria (MAN) has expressed grave concerns over the implementation of certain provisions of the Financial Reporting Council of Nigeria (Amendment) act, particularly those relating to charges on non-listed entities, like most members of MAN.

The Director-General of MAN, Segun Ajayi-Kadir, said that these provisions, as currently implemented, pose significant challenges to the manufacturing companies, the majority of whom are non-listed entities and are categorized under the current definition of Public Interest Entities (PIEs) of the said Act.

For instance, a new section 33 introduced under the FRCN Amendment Act, 2023 mandates annual charges for non-listed entities, calculated as a percentage of their annual turnover (maximum being 0.05% 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. 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 of whether the company is profitable or not.

The FRCN Amendment Act, 2023, Section 33 Clause 3, imposes heavy penalties on a person or an entity failing to pay annual dues with 10% of the annual due for every month of default cumulatively until payment, liable to sanctions prescribed by the Council for any default of its agents, officer or personnel engaged in the financial reporting process for failure to comply with the provision of the act and in case of chief executive officer to a penalty as may be prescribed by the Council, or on conviction to imprisonment for a term not exceeding 6 months.

The strict penalties and possible conviction to imprisonment could be construed as having the nature of a criminal law. Generally, non-payment of fees/dues typically results in other penalties or fines, and imprisonment provisions are applicable only in cases where non-payment is seen as an act of defiance or fraud.

The Section 34 of the Principle Act stipulates that the proceeds of the Fund established under Section 33 of the Act is to be applied for the expenditures of the Council, which incentivizes excessive generation of revenue and makes collection of the fees purely for administrative purposes.

Criminalizing non-payment of dues/fees, the utilization 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 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, and the commencement of implementation at this difficult time for manufacturers and other businesses amounts to yet another form of aggravated tyranny of regulation.

The investments in 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.

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.

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

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

Quite importantly, it will boost our commitment to ease of doing and align with the broader objectives of the fiscal policy and tax reforms agenda of President Tinubu, which is primarily aimed at streamlining regulatory requirements, harmonizing taxes and revenue collection agencies, promoting business growth and cultivating a competitive landscape.

Related Topics:Featured Financial reporting Council

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FG Enforcing Compulsory “No Tax ID, No Bank Account Policy”

Section 8 (2) makes Tax ID mandatory for any person to operate a bank account or get involved in insurance, stocks or allied services in the country, once the Act comes into force from January 1, 2026.

Published

2 days ago

September 5, 2025

OCHEFA

35 Views

The Federal Government is making it compulsory for all taxable Nigerians to obtain a compulsory Taxpayer Identification (Tax ID) when the new tax Acts come into force in January 2026.

The policy will be enforced by the Nigeria Revenue Service (formerly Federal Inland Revenue Services).

Ohibaba.com gathered that the Tax ID is contained in the provisions of the Nigeria Tax Administration Act, 2025, Part II Section 4 of the legislation which was recently signed by President Bola Tinubu.

It says: “Every Taxable person shall register with the relevant Tax Authority and obtain a Taxpayer Identification Card (Tax ID) for the purpose of compliance with tax obligations.

“Every ministry, department or agency of the federal, State or Local government shall register and obtain a Tax ID.”

It said that Section 6 (1) of the Act also requires Non-resident persons who supply taxable goods and services to any person in Nigeria to obtain Tax ID, as they shall be obligated to pay tax in Nigeria.

Section 7 (3) empowers the relevant tax authority to issue Tax ID to a person who should have applied for an ID but failed to do so.

The relevant tax authority is also empowered to refuse to issue a Tax ID to an applicant based on information available to it.

In such a case, the authority shall inform the applicant of its decision within five working days.

Section 8 (1) (c) makes Tax ID a condition for entering into any contract with the Federal and State governments.

The Act, however, provides an allowance to suspend or deregister the Tax ID, if the holder ceases to undertake trade or business, either temporarily or permanently.

Section 10 (1) provides, “Where a taxable person temporarily ceases to carry on a trade or business in Nigeria, the taxable person shall notify the relevant tax authority of its intention to suspend its registration for tax purposes within 30 days of such temporary cessation of trade or business.(2)

“The Tax authority shall classify the Tax ID as ‘dormant’ and place it on suspension.

(3) “Where a taxable person permanently ceases to carry on trade or business in Nigeria, the taxable person shall notify the relevant tax authority of its intention to deregister for tax purposes within 30 days of such cessation of trade or business.

Business

Nigeria to host Intra-African Trade Fair (IATF) 2027

With Lagos preparing to welcome the world in 2027, the IATF mission continues its quest to deepen trade, unlock investment, and connect Africa to itself and the world at large.

Published

2 days ago

September 5, 2025

OCHEFA

39 Views

• IATF 2025 opening ceremony , 4 September, Algiers.

Nigeria has been officially picked to host the 2027 edition of the Intra-African Trade Fair (IATF).

This was announced during the opening ceremony on Thursday in Algiers, with calls for African countries to accelerate growth in Intra-African trade and boost economic integration.

At the event, the Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, received the IATF flag on behalf of the country as Lagos was confirmed host city for the continental fair in 2027.

The Chairman of the IATF Advisory Council and former President Chief Olusegun Obasanjo, said, “Since its inception, the IATF has rotated across our continent, leaving its unique legacy and improving with each host nation.

“Today we continue the proud tradition by announcing the country that will host IATF2027.

“With Lagos preparing to welcome the world in 2027, the IATF mission continues its quest to deepen trade, unlock investment, and connect Africa to itself and the world at large.

Organised by the African Export-Import Bank (Afreximbank) in collaboration with the African Union Commission (AUC) and the AfCFTA Secretariat, the IATF brings together continental and global stakeholders to showcase goods and services, facilitates direct engagement and exchange between businesses and between businesses and government entities.

The fair was established to accelerate the implementation of the African Continental Free Trade Area (AfCFTA) agreement which aims to create a single market for goods and services across Africa.

Business

OPSN Faults Repeated Summons of Private Companies by National Assembly

OPSN members comprise the Manufacturers Association of Nigeria (MAN), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture(NACCIMA), Nigeria Employers’ Consultative Association (NECA), Nigeria Association of Small Scale Industrialists(NASS), and Nigeria Association of Small and Medium Enterprises(NASME).

Published

2 days ago

September 5, 2025

OCHEFA

47 Views

The Organised Private Sector of Nigeria (OPSN) has expressed deep concerns over incessant invitations, summons by the committee of the National Assembly on the activities of private companies.

The Association of Food, Beverages and Tobacco Employees(AFBTE) and other 25 sectoral employers ’ associations also decried this situation.

The concern was conveyed through an open letter sent to the President of the Federal Republic of Nigeria, Bola Tinubu, which was published on Thursday, September 4, 2025.

The group said that the practice has continued unhindered despite judicial pronouncements, including a pending appeal before the Supreme Court, which affirms that the powers conferred on the National Assembly in line with sections 88 and 89 of the 1999 Constitution do not extend oversight powers to private companies.

They cite judicial precedents in the case of DHL International Nigeria Limited vs Senate of the Federal Republic of Nigeria and ORS (FHC/ABJ/CS/261/2018).

The court unequivocally held that private companies do not fall within the category of persons contemplated by sections 88 and 89 of the 1999 Constitution.