#1NIGERIAN EXPORT PROMOTION COUNCIL UNDERSTANDING TAX RELIEF ON INTEREST INCOME SCHEME (TRII-S) GUIDELINES ....an incentive for manufacturing exporters NEPC NIGERIAN EXPORT PROMOTION COUNCIL WTPOWINNER 2018 Best initiative to ensure that trade is inclusive and sustainable#2Outline ☐ NEPC Core Function ☐ Vision and Mission ☐ Introduction What is Tax Relief on Interest Income? Objectives of the Scheme ☐ Eligibility Criteria ☐ Membership of the Committee ☐ Administrative Procedures ☐ Application Procedures#3Core Functions UNITY AND FAITH, PEACE AND PROGRESS The Nigerian Export Promotion Council (NEPC) is a Federal Government Agency, established by Decree number 26 of 1976 with subsequent amendments in 1986 and 1992 to perform the following key functions: ▪Promote the development and diversification of Nigeria's export trade. ▪Assist in promoting the development of export-oriented industries. ▪Play a leading role in the creation of export incentives#4Vision & Mission VISION: To make the world a market place for Nigerian non-oil products MISSION: To spearhead the diversification of the Nigerian economy by expanding and increasing non-oil exports for sustainable and inclusive economic growth VISION MISSION#5INTRODUCTION The Nigerian Export Promotion Council Act No 26 of 1976, the Export (Incentives and Miscellaneous Provisions) Act of 1986 and the various amendments, in no doubt, charged the Council with the responsibilities of promoting the development and diversification of Nigeria's export trade; assisting in promoting the development of export-oriented industries and spearheading the development and administration of export incentives programmes of the Federal Government, amongst others#6INTEREST RATES. WHAT IS TAX RELIEF ON INTEREST INCOME % Tax Relief on Interest Income is one of the tax statutes. established to encourage manufacturing of goods for export. According to section 11 (5) of Company Income Tax Act LFN, 2004, as amended states: "Interest payable on loan granted by a Bank on or after April 1, 1980 for the purpose of manufacturing goods for export, shall be exempted from tax on the presentation of a certificate issued by the Nigerian Export Promotion Council stating that the level of export specified has been achieved by the company. A company shall be deemed to be engaged in manufacturing for export if the Nigerian Export Promotion Council certifies that no less than one half of its manufactured goods disposed of in its year account is sold outside Nigeria & is not re-exported to Nigeria."#7DEFINITION OF MANUFACTURING Definition of Manufacturing Is the process of transforming raw materials through the use of labour, machines, tools and chemicals or biological processing or formulation into products suitable for use.#8OBJECTIVE OF THE TRII SCHEME OBJECTIVES Objective of the Scheme The objective of the Scheme is to stimulate and encourage banks to grant credit facilities to Nigerian exporters. The facility is extended to all banks granting loans for export activities and covers interest accruing from such loans.#9ELIGIBILITY CRITERIA An intending beneficiary must be registered with Corporate Affairs Commission ☐ The company must be duly registered with NEPC ☐ Applicant must submit up to date Tax Clearance ☐ Company profile of Applicant must be submitted ☐ The company must be a manufacturer producer of goods made in Nigeria ☐ The company must engage in manufacturing for export and not less than one half of its manufactured goods disposed of in its year account is sold outside Nigeria and not re-exported to Nigeria ☐ The company must carry out formal export with its export proceeds repatriated into a domiciliary account in Nigeria and confirmed by the Central Bank of Nigeria ☐ The beneficiary must be ready to submit its financial Statement, information on operational capacity and loan application for review by the Committee#101111 MEMBERSHIP OF THE COMMITTEE ☐ Federal Ministry of Industry, Trade and Investment ☐ Federal Ministry of Finance, Budget and National Planning ☐ Central Bank of Nigeria (CBN) Federal Inland Revenue Service (FIRS) ☐ Nigeria Customs Service (NCS) ☐ Nigerian Export Promotion Council (NEPC)#11METHOOK DONNÉES STRUCTURE EN COMPAGNIE MANAGEMENT SUPERVISION ORGANIGRAMME GESTIONDOSSIERS NOISIA ADMINISTRATIVE PROCEDURE ENTREPRISE DOCUMENTS SERVICES STRATEGIE ORGANISATION RESSOURCES COMPTABILITÉ ADMINISTRATION EFFICACITE COORDINATION HIERARCHIEF DECISIONFICHIERS INSTITUTION ACTIVITÉS MOYENS SYSTEME PILOTAGE PLANIFICATION sprobal DEVELOPEMEN TREPICTE NEPC shall serve as the Secretariat of the Committee. The Nigerian Export Promotion Council shall be responsible for the day-to-day administration of the scheme and shall in conjunction with the Implementation Committee issue, from time to time, guidelines for the effective administration. ❖ The committee shall visit the applicant's facility in order to establish their current status and to determine if they have satisfied the requirements as stated in Section 11(5) of CITA before the Certificate can be issued. ❖The Committee shall review all applications and factory visit report The committee shall meet to deliberate on applications once quarterly NEPC shall issue the Exporter Manufacturer Certificate to the companies that satisfies the conditions of the Scheme.#121. APPLICATION PROCEDURE Companies should apply formally to the Council stating the details of their application (including load requested and the facility bank(s); 2. All applications to be submitted with relevant supporting documents; 3. All submissions shall be presented to the Committee for consideration; 4. 5. For a company to be issued Export Manufactured Certificate (EMC), the facility must be visited; The company shall provide to the Nigerian Export Promotion Council accurate information on the total revenue, both local sales and export sales; 6. Application documents under the Scheme shall include: a. Audited Financial Statement for three preceding years, as applicable with relevant Notes to the Accounts. b. Export documents, which shall include, amongst others; c. Forms NXP duly certified by NCS, Pre-shipment inspection agents and processing bank d. NEPC non-oil Data Form e. Clean Certificate of Inspection (CCI) f. Single Goods Declaration (SGD) forms, duly endorsed by Nigeria Customs Service g. Final Commercial Invoice h. Bill of Lading i. Evidence of full repatriation of export proceeds j. The company shall provide any other document as may be requested by the Committee. The applicable interest rate shall be within the rate allowable by the Central Bank of Nigeria. Application#13THE GUIDELINES contd. ISSUANCE OF CERTIFICATE The NEPC shall issue the Export Manufactured Certificates (EMC) to duly qualified beneficiary companies. The validity of the Certificate shall be tied to the tenure of the loan. Negotiable Export Manufacturer Certificate (NEMC) may be issued to exporters to enable them conclude loan application with their bank(s). Cate of H FEDERAL GOVERNMENT OF NIGERIA EXPORT MANUFACTURER CERTIFICATE Any T NE DAY CLIM, ZIXH NIGERIAN EXPORT PROMOTION COUNCIL FEDERAL GOVERNMENT OF NIGERIA The Government of the Federal public of Nigeria byth, which ined by the Laws of the Federal Republic of Nigeria, shall allow tax smption, bad on the approved interest rate, on the Interest income from granted ACLIMITED with the following condition: Facilitating Bank: Amount: Granted: Interstate. Repayment Commencement Data; Date of Expiry: For and one of the Comment of the Federal Republic of Honourable M Federal dry of Finance, Budgeti National Planning Wired by: Excubia Director Hi Export Promotion Cound FEDERAL GOVERNMENT OF NIGERIA NEGOTIABLE EXPORT MANUFACTURER CERTIFICATE (THIS IS NOT VALID FOR TAX RELIEF) Pursuant to the Migerian Export Promotion Council Act CAP UFN 2004, the Export (Incentives and Misc Provisions) Act CAP CHUAN 2004 and the Company Income Tax Act CAP CS LPN, 2004 Date of Iss NIGERIAN EXPORT PROMOTION COUNCIL onthe FEDERAL GOVERNMENT OF NIGERIA The Government of the Padaral kapublic of Nigeria by theksuance of an Export Manufacturer Certificate, which is governed by the Laws of the Federal Republic of Nigaria, shall allow tax exemption, based on the approved interest rate, on the interest income recaled from loans granted to ABC LIMITED. The Negotiable Export Manufacturing Certificate is therefore granted to ABC LIMITED for negotiation with intended Bank(s) for the purpose of obtaining Tax Relief on Interest Income. For and on behalf of the Government of the Federal Republic of Nigeria Executive Director/CEO Nigerian Export Promotion Council#14THE GUIDELINES contd. NEPC VERIFICATION OF CLAIMS Company visits shall be incorporated into a programme for validation of information submitted by the company and impact assessment of the scheme. The programme will include visit to validate financial as well as operational information provided by the company. 1. NIGERIAN EXPORT PROMOTION COUNCIL HEADQUARTERS, PLOT 424 AGUIYI IRONSI STREET MAITAMA P. M. B 133, GARKI, ABUJA TAX RELIEF ON INTEREST INCOME IMPLEMENTATION COMMITTEE (Manufactured Exports) FACTORY INSPECTION DATA FORM Name of Company: Address Telephone No. (5) E-mail Website 2. C. A. C. Registration No. 3. TIN No. 4. NEPC Registration No. 5. Brief Background of Company: 6. (a) Location of Factory (S).. (b) Ownership Structure (Tick as appropriate) Fully Owned Parti Owned Leasehold Toll Processing Tick as appropriate) Fully Owned Partly Owned Leasehold Toll Processing#15THE GUIDELINES contd. VIOLATION OF GUIDELINES Any violation of these guidelines by any claimants shall be handled by the Presidential Committee on Trade Malpractices and Economic and Financial Crimes Commission in conjunction with members of the Implementation Committee.#16NEP C NIGERIAN EXPORT PROMOTION COUNCIL hank WTPOWINNER 2018 Best initiative to ensure that trade is inclusive and sustainable