The Nigerian Export Promotion Council (NEPC) has requested qualifying exporters to submit baseline data for the determination of export ratings for the 2017 fiscal year i.e., incentive rates applicable under the revised export expansion grant scheme ("the Revised EEG" or "the Scheme"). This follows a similar request made earlier in the year for submission of 2013 to 2016 baseline data.
It would be recalled that effective 1 January 2017, the Federal Government of Nigeria (FGN) reintroduced the Scheme after a three-year hiatus and makeover. Details of the Scheme have been outlined in our Trade Newsletter. This request by NEPC is therefore in furtherance of FGN's objective of settling the incentive payments due on qualifying exports made in the 2017 fiscal year.
The baseline data required by NEPC for the 2017 fiscal year includes:
- completed baseline forms 1A, 1B, 1C and their annexes
- audited financial statements (AFS), which should include value added statements for the respective base years
- breakdown of sales into local and export sales (exchange rate used in converting export sales should be shown)
- breakdown of cost of sales into local and foreign input
- details of additions to fixed assets for the base year
- company tax clearance certificates (for preceding three years, where applicable) and export expansion plan in line with revised export expansion grant (EEG) scheme
Existing companies that are submitting baseline data for the first time are required to submit their 2014, 2015 and 2016 AFS, whilst new companies are expected to submit their current management account and projected 2018 financial statements. Submission commenced on Monday, 20 November 2017 and the deadline is Friday, 29 December 2017.
NEPC has also requested all beneficiaries under the old EEG scheme, who are in possession of unutilized negotiable duty credit certificates (NDCCs) (the credit certificates as known under the old EEG scheme), to return the NDCCs for verification. It would be recalled that some beneficiaries under the old EEG scheme were issued NDCCs but never utilized them until suspension of the old EEG scheme. Submission commenced on Monday, 20 November 2017 and the deadline for this is Monday, 22 January 2018.
A copy of the public notice can be accessed here.
The reintroduction of the Scheme is one of the many moves by the FGN to stimulate the non-oil sector, seen by many as the foundation of a sustainable economy and critical to the success of the FGN's economic recovery and growth plan. It is therefore no surprise to see the FGN aggressively pursue implementation of the Scheme. However, until credits issued under the Scheme or old EEG scheme are utilized, anxiety would remain in the minds of qualifying exporters.
We recommend that qualifying exporters submit their baseline data and unutilized NDCCs (where applicable) before the communicated deadlines. Importantly, intending applicants must adhere to the guidelines and accurately complete the forms to avoid rejection of their application.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.