Manufacturers seek tax relief amid declining sales

The Manufacturers Association of Nigeria Manufacturers has urged the government to give manufacturers tax relief to enable them to cope with the drop in sales.

The Director General of MAN, Segun Ajayi-Kadir, told Sunday PUNCH in a telephone chat that manufacturers in the country currently pay between 60 and 120 different taxes.

He stated that manufacturers were burdened by numerous taxes across the three tiers of government and hoped government action would bring relief to the sector.

“Currently, manufacturers pay anywhere between 60 and 120 different taxes from the three tiers of government. If that is reduced to below 10, it will be a huge relief for us,” Ajayi-Kadir asserted.

Manufacturers are concerned about their financial stability after revealing that the value of their unsold finished goods inventory surged by 42.93 percentage points in the first half of 2024 to N1.24tn from N869.37bn in 2023.

Ajayi-Kadir expressed optimism over the recently introduced withholding tax regime, describing it as a much-needed relief for manufacturers and businesses across the country.

He hailed the development as a positive step, particularly for small and medium-scale industries.

Ajayi-Kadir, who also serves on the Presidential Committee on Fiscal Policy and Tax Reform, noted that the reforms, approved by President Bola Tinubu, aligned with the recommendations of the committee.

“I am very proud of the development,” he said, acknowledging the relief tax reforms would bring to the business community.

The new withholding tax regime is part of a broader fiscal policy overhaul aimed at streamlining Nigeria’s complex tax system.

One of the key highlights of the reform is the exemption of businesses with a turnover of less than N50m from withholding tax, which Ajayi-Kadir hailed as a major step towards boosting small enterprises.

“If we are going to have businesses which operate at less than N50m turnover freed from the burden of tax, it will be good not only for manufacturers but for Nigerians as well,” he added.

Ajayi-Kadir also noted the new tax structure would have far-reaching implications for economic growth, as the reform would not only ease the tax burden on manufacturers but would also enable the government to collect more appropriate and streamlined taxes.