MAN seeks new industrial policy, end to tax multiplicity

The Manufacturers Association of Nigeria (MAN) has urged President Bola Tinubu to create new industrial policies for the country’s manufacturing sector as part of efforts to achieve the country’s industrialisation agenda.

MAN president, Francis Meshioye, said this, noting that there is an urgent need to inject new policies into the country’s industrial sector, not just to reposition the manufacturing sector, but to also stimulate its growth and achieve optimal capacity utilisation.

According to him, the manufacturing sector needs significant improvement in the quality and supply of electricity to boost energy efficiency and consistent infrastructure development to make a statement of industrialisation agenda targets.

“Nigeria at this point in our economic development needs to establish synergy between our trade and industrial policies. It will be a great legacy if this is achieved during your tenure because industry and trade are under your portfolio.
“In addition, it will also be great if your tenure creates a new industrial policy for the country. As MAN’s president, I appreciate your support to the cause of the association, as we continue to strive to transform our country to a fully industrialised economy,” he said.

Speaking further, he added that the government should engage in constructive dialogue with the stakeholders in the organised private sector (OPS) to share their concerns, provide feedback on the potential impacts of the policy changes and collaborate to find solutions to mitigate adverse effects on businesses.

Speaking on policy clarity and predictability, he said the government should provide clear and consistent policies to provide certainty for businesses, adding that frequent policy changes and uncertainty could hinder long-term investments and growth. He also recommended an economic impact assessment, saying the government should conduct a comprehensive economic impact assessment of the fuel subsidy removal, FX issues and other policy measures. To him, this assessment should identify potential challenges and opportunities for the private sector and inform further adjustments to the policies if necessary.

On access to credit, Meshioye pointed out that to ensure effective implementation of the plans to support the manufacturing sector and MSMEs, the government must provide streamlined processes for accessing credit and preferential terms that are suitable for different types of businesses. Stressing the importance of infrastructure development, the MAN boss said government’s undivided attention and priority must be paid to infrastructure development projects to enhance transportation, logistics, and energy supply.

On transparent and efficient implementation, he said: “We recommend transparency and efficiency in the disbursement of funds and implementation of support programmes. This will ensure that the resources reach intended beneficiaries promptly.”

On the need for continuous monitoring and feedback mechanism, he advised that government should establish a monitoring and feedback mechanism to assess the effectiveness of the implemented policies and make necessary adjustments based on real-time feedback from businesses.

Meshioye also lamented that multiple taxation hurts businesses and has only worsened job losses in the manufacturing sector. He said that the need to eliminate multiple taxation imposed on businesses, by the Committee, is in line with its proposal to stop about 190 taxes choking businesses currently.

According to him, the consequences of multiple taxation are immense and include the rising cost of doing business and rapid divestment in the manufacturing sector.

He added that these issues combine to depress demand, worsen job losses and increase the incidence of poverty and low revenue generation from the sector. “We are confident that the Committee will adequately address this problem. Our Director-General represents the Organized Private Sector (OPS) on the committee and we look forward to working jointly with the representatives of the Ministry on the Committee to make the case for fair taxation of the manufacturing sector.”

He added that the committee should endorse its recommendations on tax and fiscal policies as they affect the country’s manufacturing sector’s operation. Meshioye said the OPS backed the proposal of the committees on the reduction of multiple taxes, but blamed states for multiple taxation. He lamented that multiple taxes have compounded rising production costs, leading to reduced profit margins, supply chain disruptions and a reduction in consumer spending.

Speaking further on fiscal policy, he said that tariff reduction on major industrial raw materials already achieved by MAN, include, reversal of VAT from 10 per cent to the previous five per cent, removal of excise duty re-introduced on some locally manufactured products and reversal of the lifting of import prohibition on some products earlier prohibited from import.

Other fiscal policy measures achieved by MAN include tariff reduction on major industrial raw materials to five per cent, removal of VAT on industrial machinery and spare parts, removal of import duty on some machinery, abolition/reduction of excise duty on some products; favourable interception and implementation of the withholding tax law in respect of manufacturing inputs and some services and removal of VAT on pharmaceutical raw materials and educational materials/equipment.

Others are the establishment of fast-track clearing procedures at the ports for bonafide manufacturers and the elimination of import controls especially during the import licence regime.

In cooperation with the Joint Tax Board, MAN has continued to advocate against multiple taxation through the promulgation by the Federal Government of Decree 21 of 1998 which defined the taxing powers of the three tiers of government.