On 14 October 2020, the Nigerian Export Promotion Council (NEPC) issued a Circular directing exporters interested in the Export Expansion Grant (EEG) Scheme, to submit their baseline data in hard and soft copies for their 2019 and 2020 exports. This is in preparation for the official launch of the EEG web portal.
What is EEG?
The EEG is an incentive scheme operated by the NEPC which is granted to non-oil exporters who repatriate in full, the proceeds of their export transactions, as confirmed by the Central Bank of Nigeria. The certificates issued under this scheme are called the Export Credit Certificates (ECC).
The ECC granted is a percentage of the export proceeds ranging from 5% for merchant exports to 15% for fully manufactured exports. The ECC can be utilized to pay taxes and settle other obligations like AMCON loans. See our previous tax alert in this link.
The scheme was introduced to accelerate export volumes, encourage export diversification and market coverage.
Although the EEG scheme was suspended in 2013 due to perceived abuse, it was reintroduced in 2017.
Highlights of the circular
According to the NEPC circular, the submission will take place between 19 October 2020 to 20 November 2020. The baseline data submissions should include the following:
- Completed Baseline Forms 1A, 1B, 1C and their annexes. The forms can be assessed on www.nepc.gov.ng.
- Audited Financial Statements (AFS) which must include Value Added Statements for the respective base years. Photocopies of the AFS will not be accepted except if duly endorsed using the company's auditor's seal.
- Tax Clearance Certificates and Export Expansion Plan in line with the revised EEG Scheme.
- Export Schedule for each year of application.
- Additional information required include:
- Analysis of turnover into local and export sales.
- Analysis/ schedule of total export sales in Naira, showing the conversion rates used.
- Details of addition to fixed assets during the year.
- Breakdown/ analysis of cost of sales into local and foreign input (raw materials and packaging)
The application information and all accompanying documents must be scanned in a single PDF file and saved in a flash drive for submission.
Companies submitting this data for the first time should include the AFS of the 2 preceding years, in addition to the AFS o the base year. New companies should submit audited Statement of Affairs, current year management account and projected statements for 2020 and 2021 financial years.
The relevant submissions should be forwarded with separate covering letters for 2019 and 2020 exports, and addressed to the Executive Director/Chief Executive Officer of NEPC.
The introduction of the EEG web portal is in line with the ease of doing business initiative of the Presidential Enabling Business Environment Council ("PEBEC"). By the time the portal is fully functional it may ease the process of applying for the grant.
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.