The Manufacturers Association of Nigeria (MAN) has finally confronted the Presidential Committee on Fiscal Policy and Tax Reforms over the country’s controversial new tax laws — and the government says manufacturers should expect relief, not pain.
At a high-level engagement held in Lagos on Thursday, manufacturers met with the committee to break down what the reforms truly mean for Nigerian factories, supply chains, and production costs. The forum, themed “From Legislative Assembly to Factory Floor,” aimed to dismantle confusion and calm fears across the sector.
Chairman of the Presidential Committee, Mr. Taiwo Oyedele, insisted the reforms were designed to fix Nigeria’s broken tax system by promoting equity, competitiveness, and simplicity — three words manufacturers say have long been missing from fiscal policy.
According to Oyedele, manufacturers will now be able to claim input VAT on assets and services, benefit from revised income bands, higher exemption thresholds, and access new reliefs and allowances. He also announced the introduction of a tax ombudsman and withholding tax exemptions targeted at manufacturers and small businesses.
The reforms are tied to the Economic Development Incentive Scheme, which prioritises key sectors including agriculture, food production, energy, mining, health, textiles, ICT, creative industries, chemicals, building materials, steel, transportation, machinery, and environmental services.
On VAT specifically, Oyedele disclosed that locally manufactured sanitary towels, assistive devices, and disability-related products are now exempt. Essential inputs such as fertilisers, agricultural chemicals, veterinary medicines, and animal feeds have been zero-rated.
Even more striking, VAT on petroleum products, renewable energy equipment, CNG, and LPG may be suspended — pending a directive from the Minister of Finance.
However, Oyedele clarified that input VAT deductions will only apply to taxable supplies, while non-taxable portions remain non-deductible. Research and development expenses are now deductible too — though capped at five per cent of annual turnover.
Manufacturers didn’t hold back. Concerns raised included multiple taxation, high tax burdens, VAT compliance bottlenecks, raw material taxation, and aggressive subnational tax practices. Exporters also questioned the removal of income tax exemptions and inconsistencies across tax laws.
Oyedele acknowledged the frustrations, admitting that “taxing poverty and multiple levies have distorted the system.” He assured manufacturers that the reforms were specifically crafted to reverse these distortions and strengthen Nigeria’s manufacturing base.
Reaffirming government commitment, he described manufacturing as a critical engine for job creation, exports, and economic growth, adding that the reforms should deliver visible improvements if properly implemented.
Still, he warned that manufacturers must keep accurate records to fully benefit from the new system.
“Manufacturers must understand what they can claim and position themselves to take advantage of the opportunities embedded in the tax reforms,” Oyedele said.
MAN’s Director-General, Mr. Segun Ajayi-Kadir, praised manufacturers for speaking frankly and pledged continued engagement with the government to protect the sector’s sustainability.
The promises are bold. The incentives look attractive. But Nigerian manufacturers have heard sweet policy speeches before. The real question remains: will these reforms survive Nigeria’s tax reality — or die at the factory gate?
