INTRODUCTION OF ENTERPRISE RIGHTS’ PROTECTION FUND

Our Ref: NECA/SELA/H.8

To: All Member-Companies

As you are well aware, there have been many governmental actions of recent that clearly suggest that business is under siege. The onslaughts are basically of three types, viz:

  • Fiscal: multiple taxation, duplication of taxes, proliferation of taxes, wrong application of existing tax/ levy system
  • Regulatory highhandedness
  • Abuse of legislative oversight and investigative power

Most, if not all, of these actions are clear attack on the rights of enterprise. In our opinion, dialogue, advocacy and lobbying seem to have been ineffective in protecting the economic rights and interest of businesses in our environment. The government only listens to itself while the law makers have become law unto themselves. Therefore, in recent times, we have been left with no option but to seek judicial protection, which has provided some of the following reliefs:

  • Prevented Regulatory Agencies and the National Assembly from harassment of Private Companies
  • Savings by members from travelling, accommodation expenses, executive time and payments to consultants to prepare reports, etc.
We currently have five (5) cases in court which might go all the way to the Supreme Court. The unfortunate thing is that recent developments around the subject of Kano State Government’s enactment of Kano State Revenue Administration Law, 2017, which if not challenged could open the flood gate for Consumption Tax in the 36 states of the federation thereby ushering in a dispensation of double consumer tax all over the federation may compel us to file in more suits.

It has, therefore, become necessary for the Association to have a more reliable and dependable funding mechanism for protecting enterprise rights through litigation. Currently, we raise funds on a need basis. With the increasing number of litigations and the long process, which seems to now entail involvement of the higher courts, we have suddenly found ourselves either lacking the funds to see the process through or incapacitated from filing fresh suits. Besides these, the burden of payment is being borne by very few companies. In fact, less than 20% of members respond to funding requests. Within the responsive percentage, only 40% of them pays the full requested sum while others do discretional contributions

In view of the overwhelming support by members for us to retain litigation in our arsenal, a new funding arrangement that will guarantee adequacy and ready availability of funds for sustainable legal battle has been approved by the Governing Council of the Association with effect from 1st January, 2018. An Enterprise Rights’ Protection Fund will be included in the demand notice for annual subscription. The funds so gathered will be channeled towards class action to defend / prosecute issues affecting member-companies.  The size of fund will be reviewed yearly in order to determine if collection would be required in any one year. The structure of the levy will be based on size of business: Large scale, Medium Scale and Small Scale to determine what would be paid by each Company in each group.

A sound Governance Structure has also been approved for the fund to ensure fairness and transparency with an annual reporting on its management through the Management Committee. The essence of this communication, therefore, is to serve as advance notification to member-companies for early preparation towards the new dispensation.

We thank you for your continued interest in your Association for the good of its members.

Yours faithfully,


O. A. Oshinowo
Director-General

Cc:    President, NECA
Vice Presidents, NECA
Treasurer, NECA

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