Contrary to expectations that the new Nigeria Tax Act would bring an end to the burden of multiple taxes and levies on businesses, manufacturers say the reality on the ground remains largely unchanged.
The Manufacturers Association of Nigeria, MAN, says its members are still confronted by multiple tax collectors and regulatory agencies, raising fresh concerns about the effectiveness of the new tax regime.
The assessment is contained in MAN’s CEO Confidence Index for the second quarter of 2026.
According to the association, the Nigeria Tax Act 2025, which was expected to streamline the tax system and reduce the burden of multiple taxation, has yet to deliver the anticipated relief to manufacturers.
MAN’s Director-General, Segun Ajayi-Kadir, says manufacturers continue to encounter multiple tax collectors and regulators during the review period.
For manufacturers, the concern goes beyond the number of taxes and levies.
They are also dealing with multiple regulatory requirements, higher operating costs and an increasingly difficult business environment.
MAN’s latest confidence index describes the operating environment as largely unsupportive of manufacturing growth, with local sourcing of raw materials emerging as the only area that recorded noticeable improvement during the quarter.
But even that improvement comes with a caveat.
MAN attributes the increase in local sourcing largely to persistent foreign exchange constraints, which have made it more difficult and expensive for manufacturers to import raw materials and other production inputs.
The association warns that insecurity in parts of the country could now undermine the gains recorded in local sourcing, particularly where manufacturers depend on domestic suppliers and transportation networks.
The pressure is also being reflected in manufacturers’ financial performance.
While sales volumes recorded a modest improvement in the second quarter, MAN says rising production, distribution and logistics costs continued to erode profit margins.
This means that higher sales are not necessarily translating into stronger profitability, as a significant portion of the additional revenue is being absorbed by increasing operating costs.
The report further shows that capacity utilisation, production levels, investment and employment remained broadly unchanged during the period.
For an economy seeking stronger industrial output and job creation, the figures suggest that manufacturers are still operating cautiously, with cost pressures and policy uncertainties limiting their ability to expand.
On the foreign exchange market, MAN acknowledges that recent reforms have helped to bring some stability to the naira.
However, the association says stability alone is not enough.
It maintains that inadequate access to foreign currency remains a major constraint for manufacturers, particularly businesses that still depend on imported machinery, raw materials and other critical inputs.
With multiple taxation, regulatory pressures, insecurity, high logistics costs and inadequate foreign exchange supply continuing to weigh on operations, MAN says more needs to be done to translate Nigeria’s tax and economic reforms into tangible relief for manufacturers.
The association is warning that unless the cost of doing business comes down, the expected benefits of the new tax regime may take longer to reach the manufacturing sector.
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(Editor: Anoyoyo Ogiagboviogie)
