As part of renewed efforts by the federal government to raise confidence in promoting non-oil exports, it has commenced a verification of the claims by exporters under the Export Expansion Grant (EEG) scheme.
Before now, exporters had been groaning over the hanging of their returns from the EEG which they said had been frustrating more investments in the sector.
A circular signed by the Director, Export Development and Incentives (NEPC), George Enyiekpon, revealed that the audit is part of efforts aimed at determining the EEG rate for four years covering 2013 to 2016.
Business Hilights recalls that EEG is an initiative of the Federal Government that was meant to encourage exporters of non-oil products, including agro-commodities, in order to cushion the effects of infrastructural deficiencies and reduce the overall unit cost of production.
Details on its relevance showed that federal government introduced the scheme through the Export Incentives and Miscellaneous Provisions Act, Cap 118 of 1986 to enhance the contributions of non-oil exports to the national economy.
The scheme was designed in a way that a financial credit is applied on the value of products export from Nigeria ranging from five per cent to 30 per cent.
However, the financial credit is not cash-funded, but provided as Negotiable Duty Credit Certificate, which can be applied against import duties on other items.
To give bite to the renewed efforts, the Federal Government had set aside a total sum of N20bn as tax credit in the 2017 budget to settle part of the N300bn outstanding claims under the EEG.
The move was a reaction to complains by exporters that the administration of the grant is lop-sidedness in the payment system which compelled government suspend the scheme for review owing to allegations of regularities in its implementation by manufacturers.
Signal to government’s readiness for a return the scheme emerged from the Minister of Industry, Trade and Investment, Dr. Okechukwu Enelamah, who said last two months that the government had held a meeting with the exporters on the need to resume the scheme.
He gave assurance that the scheme had been reviewed to prevent it from being abused by exporters, hinting that under the new arrangement, the backlog of exporters’ claims would be settled with a tax credit and not import credit as argued in some quarters.
According to the NEPC directive to exporters, they are advised to submit audited financial statements, which must include value added statements for the respective years.
The circular also advised prospective beneficiaries to give additional details and information that will aid their claims including analysis of turnover into local and export sales, and schedule of total export sales in naira showing the conversion rates used.
They are to furnish in their details, details of addition to fixed assets during the year, breakdown and analysis of cost of sales into local and foreign inputs such as raw materials and packaging.
The NEPC circular read in parts; “This is to inform all exporters interested in or those already registered for the Export Expansion Grant scheme that consequent upon the lifting of the suspension of the scheme by the Federal Government, submission of 2013, 2014, 2015 and 2016 baseline data for the purpose of determining their EEG rates for 2014, 2015, 2016 and 2017 non-oil exports respectively commences from Wednesday, March 29, 2017,” the circular read in part.
