The Manufacturers Association of Nigeria (MAN) has expressed strong opposition to the implementation of new financial charges imposed on private companies by the Financial Reporting Council of Nigeria (FRCN) under the recently amended FRCN Act.
In a statement by the Director General of MAN, Segun Ajayi-Kadir, the charges threaten business survival and contradict the government’s ease of doing business agenda.
Ajayi-Kadir described the charges as “astronomical,” highlighting that non-listed manufacturing companies—most of which are MAN members—are now classified as Public Interest Entities (PIEs) and subjected to hefty fees.
“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 DG noted, quoting Section 33 of the FRCN Act 2023.
Ajayi-Kabir argued that beyond the financial burden on manufacturers, the act prescribes severe penalties, including a 10% monthly penalty for non-payment and potential imprisonment of up to six months for defaulting CEOs.
He stressed that this criminalization of non-payment of charges is excessive, arguing that nonpayment of fees typically attracts fines or regulatory penalties, not imprisonment.
“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,” he said.
Not the right time for new charges
MAN warned that the implementation of these charges at a time of economic difficulty could stifle investment in Nigeria’s productive sector.
The association, therefore, urged the FRCN to suspend the implementation of these fees and reconsider their alignment with Nigeria’s ongoing tax reform efforts.
“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 enactments of the tax reform laws and realign its operations with the relevant provisions,” the DG noted.
According to Ajayi-Kabir, halting the implementation of the new FRCN charges would support the federal government’s broader fiscal and tax reform agenda, which aims to streamline regulations, harmonize taxes, and promote business growth.
