NECA Condemns Outrageous Levies On Private Companies By Financial Reporting Council

The Nigeria Employers’ Consultative Association (NECA) has condemned the Financial Reporting Council of Nigeria’s imposition of outrageous annual dues on private or non-quoted companies.

This condemnation comes against the backdrop of the recent implementation of the Financial Reporting Council Amendment Act 2023 (FRC Act), which widened the net of companies that fell under the FRC’s purview and also reviewed the payment structure of these companies as their annual dues moved from N1 million to hundreds of millions of naira based on their annual turnover.

NECA declared the introduction of the levies unjust and unconscionable, particularly when the dues for quoted or listed companies are capped at N25 million.

According to the Director General of NECA, Smatt-Oyerinde, the policy would not only contradict the Federal Government’s efforts to stimulate economic growth, attract investment, streamline the tax regime, and promote job creation but also threaten the survival of thousands of private enterprises already grappling with rising operational costs, multiple taxation, regulatory bottlenecks, and economic uncertainty.

Smatt-Oyerinde described the imposition of the arbitrary levies as strange, especially at a time when the government was championing the Ease of Doing Business (Executive Order 001) and actively seeking foreign and local investments to boost Nigeria’s economic growth as well as streamline the imposition of taxes and levies within the country.

He noted with concern the increasing cost of running businesses in Nigeria at this time, noting that any additional financial demand would add unnecessary strain and stifle business expansion.

“Many companies especially those in manufacturing, trading, and essential services—operate on thin margins. Imposing additional costs increases the risk of layoffs, business closures, and economic downturns. Apart from that, the perception that regulatory agencies can impose arbitrary fees on businesses, sending a negative signal to both local and foreign investors and weakening Nigeria’s competitiveness in the global economy. It will only serve to discourage investment when this is most needed to boost the economy,” he said.

He therefore called on the Federal Government, National Assembly, and all relevant authorities to act swiftly to protect businesses from unjustified regulatory exploitation and take a more pragmatic approach to implementing economic policies to ensure job security for the people and the survival of businesses in Nigeria.

He further urged the Federal Government to suspend the enforcement of the new FRC annual dues on private companies and revert to the previous regime of N1 million (one million naira) until a transparent and comprehensive review is conducted.

In the same vein, he urged the National Assembly to initiate an immediate legislative review of the FRC Act (as amended in 2023) to remove ambiguities, streamline FRC oversight and ensure fairness in the regulatory framework.

Additionally, he stressed the need for the FG, through the Federal Ministry of Industry, Trade and Investment, to engage with key stakeholders in the Organised Private Sector (NECA, MAN, NACCIMA, and other business advocacy groups) to develop a fair, justifiable, and economically sustainable compliance framework.

He maintained that the private sector remains the backbone of Nigeria’s economy, noting that the Federal Government cannot afford to develop policies that are not only inimical to their growth but also detrimental to national development.