MAN Demands Urgent Review of FRCN’s Soaring Annual Charges on Private Companies

Manufacturers Association Warns of Harsh Impact on Business Sustainability

The Manufacturers Association of Nigeria (MAN) has raised serious concerns over the implementation of certain provisions in the Financial Reporting Council of Nigeria (FRCN) Amendment Act, 2023, particularly the introduction of annual charges on non-listed entities, which include most of MAN’s members.

Segun Ajayi-Kadir, Director General of MAN, described the provisions as an undue financial burden on manufacturing firms, many of which are categorized as Public Interest Entities (PIEs) under the revised Act.

A major point of contention is Section 33 of the Amendment Act, which mandates annual charges for non-listed companies based on their turnover, with no cap on the maximum amount payable. Previously, publicly listed companies were required to pay a maximum of ₦1 million annually, but this has now surged to ₦25 million. Even more troubling, non-listed companies—previously exempt—are now subject to unlimited charges, regardless of profitability.

Beyond the financial strain, the Act also introduces strict penalties for non-compliance. Failure to pay the annual dues attracts a monthly penalty of 10% of the outstanding amount, cumulative until full payment is made. Additionally, executives of defaulting companies risk sanctions or imprisonment for up to six months. MAN argues that criminalizing non-payment of fees—primarily intended for administrative expenses—creates a draconian regulatory environment.

Ajayi-Kadir emphasized that these measures contradict the government’s commitment to ease of doing business. He warned that excessive regulatory costs at a time when manufacturers are grappling with economic challenges could stifle investment and disrupt industrial growth.

As Nigeria moves toward tax reforms, MAN urges the FRCN to suspend the implementation of these charges and realign its policies with evolving fiscal regulations. Immediate government intervention is necessary to prevent severe economic repercussions, protect businesses, and uphold the administration’s agenda of streamlining regulations, harmonizing taxes, and fostering a competitive business environment.

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