National Housing Fund (Establishment) Act, 2018: Analysis & Recommendations For Legislative Review

6. Sustainable Development Levy on locally produced or imported cement:

   The new NHF Act imposes a fresh tax called Sustainable Development Levy (the “Levy”) on the production and importation of cement in Nigeria[28]. The Levy is to be paid and credited into the Fund[29] and is calculated at the rate of 2.5% ex-factory price before transportation cost for each bag of 50kg or its equivalent in bulk[30]. The duty to assess and collect the Levy is conferred on the Federal Inland Revenue Service (“FIRS”)[31] under the new NHF Act. The FIRS is required to remit the Levy collected to the FMB in the prescribed form[32].

   After proper assessment of the Levy due to be paid by a manufacturing company or importer in a year, the FIRS is to issue a “Notice of the Assessment” to the affected manufacturer/importer following which the Levy shall become payable within sixty (60) days[33]. Where the Levy is not paid within the specified period, the FIRS is required to serve on the affected manufacturing company or importer a “Demand Notice” for the unpaid Levy plus a sum which is equal to 2% of the Levy as penalty[34]. Any manufacturing company or importer that fails to pay the Levy imposed within two (2) months of the service of the Demand Notice commits an offence and liable on conviction, in the Federal High Court, to a fine not less than One Hundred Million Naira (N100m) as stipulated in the new NHF Act[35]. In addition to this, a Chief Executive Officer (“CEO”), director or officer purporting to act in the capacity of the company/importer shall be liable, upon prosecution and conviction, to a fine of Ten Million Naira (N10m) or imprisonment for a term of three years or both[36]; unless it is proven that the act or omission constituting the offence took place without the knowledge, consent or connivance of the CEO, director or officer[37].

   This is a new development, as no tax was imposed on cement manufacturing companies and importers under the 1992 Act. The Levy is thus part of the additional sources of funding created by the new NHF Act to boost effective financing of housing development in Nigeria. 

28 Section 3(f) & Section 4(1), ibid.
29 Section 4(1), ibid.
30 Ibid.
31 Section 13(1), ibid.
32 Section 13(2), ibid.
33 Section 13(3), ibid.
34 Section 13(4), ibid.
35 Section 13(5), ibid.
36 Section 13(6), ibid.
37 Section 13(5), ibid.