By Yinka Kolawole

The Manufacturers Association of Nigeria (MAN) has raised serious concerns over the Financial Reporting Council of Nigeria (FRCN) Amendment Act, which imposes cumulative annual charges on non-listed entities.

In a statement released yesterday, Segun Ajayi-Kadir, Director General of MAN, warned that the implementation of these provisions would adversely affect manufacturing companies, the majority of which are non-listed entities but are now classified as Public Interest Entities (PIEs) under the new Act.

Ajayi-Kadir highlighted the following problematic aspects of the amendment:

Introduction of Annual Charges: Section 33 of the FRCN Amendment Act, 2023, mandates annual charges for non-listed entities, calculated as a percentage of their annual turnover.

Companies with a turnover above N10 billion may be charged up to 0.05% of their turnover.

Previously, publicly listed companies paid a maximum of N1 million annually, but this has now increased to N25 million.

For non-listed companies, there is no cap, and the charge is based on turnover regardless of profitability.

Harsh Penalties and Criminalization:

The Act imposes a 10% penalty on unpaid dues for every month of default, accumulating until full payment.

Companies and their officers, including CEOs, risk sanctions or even imprisonment of up to six months for non-compliance.

MAN argues that criminalizing non-payment of administrative dues is excessive and draconian.

Ajayi-Kadir stated that the Act contradicts the government’s Ease of Doing Business agenda and poses a serious threat to investments in Nigeria’s manufacturing sector.

“If the implementation of this annual charge is not halted, it will negatively impact the productive sector and discourage investment,” he warned.

MAN has called on the FRCN to reconsider its stance, urging the Council to:

Suspend the implementation of the charges.

Align its operations with upcoming tax reform laws.

Engage stakeholders to find a balanced approach that supports business growth while maintaining financial compliance.

“As the umbrella body for manufacturers in Nigeria, we urge FRCN to await the enactment of tax reform laws and adjust its policies accordingly,” MAN concluded.