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The Manufacturers Association of Nigeria (MAN) on Thursday engaged Mr. Taiwo Oyedele, Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, to discuss the benefits of the new tax laws, clarify misconceptions, and address manufacturers’ concerns over implementation.
The forum in Lagos, themed “From Legislative Assembly to Factory Floor: What the New Tax Laws Mean for Nigerian Manufacturers,” provided a platform for stakeholders to interact with the tax committee.
Oyedele said the reforms aimed to achieve equity, competitiveness, and simplicity in Nigeria’s fiscal framework.
He highlighted key changes beneficial to manufacturers, including eligibility to claim input Value Added Tax (VAT) on assets and services, exemption thresholds, revised taxable income bands, and certain reliefs and allowances.
Other measures include establishing a tax ombudsman and withholding tax exemptions for manufacturers and small businesses.
He explained that the Economic Development Incentive Scheme under the reforms identified priority sectors, including agriculture, food production, energy, mining and quarrying, health, textile production, ICT, creative industries, chemicals, steel, metals, transportation, industrial machinery, environmental services, and other manufacturing-related activities.
Additional support measures include VAT exemption on locally manufactured sanitary products, assistive devices, and disability-related products. Zero-rated supplies include fertilizers, locally produced agricultural chemicals, veterinary medicines, and animal feeds. VAT on petroleum products, renewable energy equipment, CNG, LPG, and other gaseous hydrocarbons may be suspended by the Finance Minister.
Oyedele also noted that input VAT on taxable supplies, including services and fixed assets, may be deducted from output VAT payable, limited to taxable supplies. Input VAT relating to non-taxable supplies is not deductible. Research and development (R&D) expenditures are deductible up to five percent of turnover for the relevant year.
Manufacturers raised concerns about multiple taxes and levies, high tax burdens, partial implementation of withholding tax exemptions, disproportionate obligations, policy uncertainty, VAT compliance challenges, taxation of raw materials, subnational tax practices, removal of income tax exemptions for exporters, and discrepancies in tax laws.
Oyedele reassured manufacturers of the Federal Government’s recognition of the sector as a driver of job creation, export growth, and economic development.
He emphasized that the reforms were intended to address distortions in the tax system, including multiple taxes and the disproportionate burden on low-income earners.
He urged manufacturers to stay informed about the tax provisions using credible sources and to maintain proper records to maximize benefits under the reforms. He also assured that concerns about withholding tax deductions and disproportionate burdens would be addressed.
In his remarks, MAN Director-General Segun Ajayi-Kadir commended manufacturers for articulating their concerns and expectations regarding the tax reforms. He pledged ongoing engagement with the government to ensure the sector’s growth and sustainability.
