Breaking News
Translate

MAN seeks 5 -7-year tax holiday for manufacturing sector

By Franklin Alli
Manufacturers Association of Nigeria (MAN), has called on the Federal Government to grant operators in the industrial sector of the economy  a 5-7 years tax break for them to stimulate investments in the sector.

“The tax holiday should start from next year, as Federal Government’s new year gift to manufacturers,” said Chairman MAN Ogun Branch, Dr. Dolapo Ogutuga.

Ogutuga, who bore the minds of sector operators during their annual general meeting for financial year ended 2008, told Vanguard in an interview: “our main reasons for requesting the tax holiday are that we have had several years of hard knocks, we are inundated with all sorts of taxes and levies at both states and national level.

Some of these taxes and levies are legitimate and  illegitimate. These have actually made it very difficult for manufacturing to thrive. Many of them are producing with old machines which they had purchased when the naira was very strong against the dollar and over the years they have not been able to change theses machine.  You can not match many of these modern machine at the rate of their speed and productivity and they cost a lot of money.  And for us to be able to purchase them, we need that kind of tax holiday.  We are not advocating for any grant because grant is free money, and what you get free you don’t value it.”

According to him, manufacturers are therefore calling on government to reduce the tax burden levied upon genuine manufacturing companies.

“Company tax should be reduced by giving manufacturers a 5-7 years tax break. We are aware that the taxes to be demanded by each of the three levels of government have been harmonised by Act.21 of 1998 to avoid duplication and to remove taxes which inhibit development and free movement of goods and services. We, therefore, appeal that existing tax law should be respected by the three tiers of government.

Commenting on the crisis in the banking sector, he noted: “the recent development within the financial and banking sector have dismayed us all.  The situation undoubtedly affects Nigeria’s image as a stable economy ,and, thus, affects the credibility of each of us as we seek to do business with international partners.  Of the long list of major debtors revealed recently, few are manufacturers.  This could either be because manufacturers service their loans as due or it could reinforce our long-held view that local banks have consistently refused to support local manufacturers.

On rejection of letters of credit facility, he said “Certainly, we would be very happy if our banks could have a change of heart.  What has happened showed that banks considered manufacturing to be a very risky business.  No doubt, manufacturing is very risky because if you look at the facts on the ground,

the infrastructure is not there, the security of life and property is not there, no good roads, no capital to work with.  Banks themselves are operating in the midst of hostile environment and capital was a major thing that was not made available to manufacturers and this make things very difficult.

On the 6,000 Mega watts target by December, he said : “ it will really be my joy if the December target is met.  However, even if achieved, it is not the end of the journey.   Recent events have shown that PHCN is only able to generate between 800 and 3,000 mega watts of  electricity daily.  Even at its highest, this is nowhere near the level that the country needs.  South Africa currently generates 43,000 MW and is still working to increase the level.


Disclaimer

Comments expressed here do not reflect the opinions of vanguard newspapers or any employee thereof.