NACCIMA, OPSN petition National Assembly over plan to tax FTZs

The Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and the Organised Private Sector of Nigeria (OPSN) have submitted a memorandum to the National Assembly opposing the proposed taxation of the free trade zones (FTZs).

NACCIMA and the OPSN called on the National Assembly to remove sections of the Nigeria Tax Bill 2024 that impose new tax burdens on the FTZs, a statement by the bodies said.

They argued that the proposed changes in the tax bill, which introduce mandatory minimum tax rates and eliminate tax exemptions previously granted, could lead to capital flight, job losses and legal disputes that would disrupt the economic stability of the country.

The National President of NACCIMA, Dele Kelvin Oye, raised concerns that the bill’s provisions would subject FTZs to state and local government taxes, a departure from the original legal framework that protected the zones from multiple taxation.

Oye, who is also the Chairman of the OPSN, highlighted key recommendations, including the removal of the proposed tax provisions affecting FTZs, an amendment of the Nigeria Export Processing Zones Authority (NEPZA) and Oil and Gas Free Zone Authority (OGFZA) laws to maintain tax incentives and the suspension of the new tax laws to allow businesses to adjust their financial models.

“Today, Nigeria boasts several successful FTZs, including the Lekki Free Zone, Onne Oil and Gas Free Zone and others. These zones have collectively attracted over $200 billion in foreign investments and created more than 600,000 jobs.

“This demonstrates the inherent capacity of the private sector to drive economic development. The involvement of private entities raises the importance of maintaining a competitive regulatory environment that fosters investment,” he said.

Oye also noted that “Nigeria Tax Bill 2024 proposes amendments that threaten the operational framework of FTZs by introducing mandatory minimum tax rates and removing existing tax exemptions under NEPZA and OGFZA”. The changes are poised to diminish investor confidence and negatively impact long-term investment strategies, he said.