The Federal Government has temporarily suspended the new Financial Reporting Council (FRC) annual levy imposed on public interest enterprises as opposition from businesses and experts on the fiscal policy continues unabated.
The new levy under the 2023 amendment bill applies to all incomes accruing from annual dues paid by registered professionals, registered firms of professionals, public interest entities, and other enterprises as prescribed by the Council and approved by the Minister.
The FRC Amendment Act 2023 mandates cumulative annual charges for non-listed entities and imposes a 10% monthly penalty on unpaid dues, compounding until full payment.
Specifically, the suspension of the collection of the dues was sequel to mounting pressure from private sector groups, including the Nigeria Employers’ Consultative Association (NECA) and the Manufacturers Association of Nigeria (MAN), which flawed the Financial Reporting Council (Amendment) Act 2023 for burdening companies with excessive fees.
The Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, announced the suspension of the collection of the levy by the FRC on Wednesday during a stakeholders’ meeting organised by her ministry in Abuja, where all OPS groups’ representatives expressed opposition to the implementation of the levy.
She explained: “As you know, I am a lawyer, so a suspension will be a contravention of a legislation that was passed by the National Assembly. A pause is an administrative process simply to review what we have discussed today. And so that’s what we’re going to do, because we are a listening administration.
“The private sector has asked for a range of two to three months to an indefinite suspension. We are not going to do that. So, between now and at most 60 days, we are going to set up a technical working group comprised of FRC and organised private sector representatives”, the minister added.
Oduwole recalled that the OPS groups had made formal written submissions on the levies, which would be reviewed by a committee to be set up, adding that the Chairman of the Tax Policy Reform Committee, Mr. Taiwo Oyedele, will also be a member of that committee.
She described the meeting with the OPS’ leaders and other stakeholders, including the Chief Executive Officer of the FRC, as a cordial conversation, adding that all the issues raised has been noted because the present administration is a listening government.
The minister maintained: “You know, we are a listening government, and we want the private sector to be comfortable. We want the economy to thrive, so this is what we are going to do. We have already looked at global best practices on each side, and we will come up with the best for Nigeria.
“We will make the proposition and then, of course, we have to go back to Parliament. Wherever we land, it is still going back to the National Assembly.
“We are not going to preempt the discussions and the dialogue between the stakeholders. What is clear is that they cannot pay what they used to pay, but they may not pay what they are being asked to pay”, she added.
Earlier in his remarks, the Chairman of the Organised Private Sector, Mr. Dele Oye, had urged the government to suspend the implementation of the levy as its implementation would exacerbate the burden of multiple taxes on businesses nationwide.
Also, the Director-General of the Nigeria Employers’ Consultative Association (NECA), Adewale-Smatt Oyerinde, also called for the suspension of the new levy, noting that businesses are struggling to survive and that adding more taxes could lead to closure of many enterprises.
The Chief Executive Officer of the FRC, Dr. Rabiu Olowo, had earlier justified the levy, stressing that its implementation will enable the Council to serve the financial system better.