NIGERIA’S business community is under relentless siege. In an already suffocating economic environment marked by rising costs, multiple taxation, policy inconsistency, and dwindling investor confidence, the Financial Reporting Council of Nigeria has chosen to impose yet another burden on struggling enterprises.
Under the Financial Reporting Council Amendment Act 2023, private firms—many of whom are already reeling from high energy and operating costs—now face an exponential increase in regulatory fees, from N1 million to hundreds of millions of naira, depending on turnover.
Meanwhile, listed companies, with deeper financial reservoirs, have their dues capped at N25 million. The inequity of this policy is glaring. It unfairly targets businesses that have historically borne the brunt of Nigeria’s harsh operating environment while shielding those with more significant financial muscle.
This is a textbook case of regulatory overreach. It undermines productivity, employment generation, and economic resilience.
Taiwo Oyedele, the chairman of the Presidential Tax Reforms Committee, said there were over 200 unofficial taxes in Nigeria.
The implications are dire. Businesses already struggling with multiple taxation, excessive levies, regulatory inefficiencies, and huge infrastructure deficits will come under even more pressure to downsize or close shop.
The Manufacturers Association of Nigeria reported that about 767 manufacturing companies shut down operations while 335 experienced distress in 2023.
Inventory of unsold products in the manufacturing sector rose to N1.4 trillion in the second half of 2024, up from N1.24 trillion in the first half of 2024 per MAN.
In January, the association’s Director-General, Segun Ajayi-Kadir, bemoaned the closure of 60 per cent of manufacturing concerns in the North-East due to the hostile operating environment.
The FRCN is a regulatory agency responsible for developing, promoting, and enforcing compliance with accounting, auditing, and financial reporting standards in Nigeria to ensure high-quality financial reporting and corporate governance.
It is not a revenue-generating agency and is funded by the budget. Why it needs to impose huge levies on companies remains to be explained.
The Nigeria Employers’ Consultative Association’s Director-General, Adewale Smatt-Oyerinde, notes that this policy directly contradicts the Federal Government’s much-touted “Ease of Doing Business” agenda.
It negates the principles outlined in the tax reform bills, which seek to eliminate multiple taxation in Nigeria.
“Many companies, especially in manufacturing, trading, and essential services, operate on thin margins. Adding such arbitrary financial demands increases the risk of layoffs, business closures, and an economic downturn,” he said.
Trade minister Jumoke Oduwole claimed that the Federal Government was moving to realise over $50 billion in foreign investment commitments secured by the Bola Tinubu administration, but such efforts can be undermined by policies that repel investment.
Investors thrive in environments that guarantee stability, predictability, and fairness. When regulatory agencies can arbitrarily impose levies without industry consultation, this will further erode Nigeria’s global competitiveness.
This policy is not an isolated incident. It is part of a broader trend that punishes businesses for daring to operate in Nigeria.
The Federal Government cannot afford to prioritise revenue generation over business sustainability. When businesses survive and thrive, they can create jobs, boost productivity, and generate income that can be taxed. That should be the focus.
The new levies should be suspended, and the previous N1 million fee structure retained pending a thorough review.
More importantly, there should be an urgent legislative amendment to the FRC Act to eliminate ambiguities and prevent future abuses.
Nigeria cannot afford to keep making the same mistakes. The Tinubu administration, which claims to be pro-business, must reverse this damaging policy, and focus on fostering an environment that supports, rather than punishes, entrepreneurship.
Instead of suffocating businesses, the government should be implementing incentives to drive growth in the productive sector.
Tariff cuts on critical industrial inputs, tax holidays for struggling firms, and streamlined regulatory processes would do far more to stimulate economic activity than this latest wave of arbitrariness.
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