The Nigeria Economic Zones Association (NEZA) has called for constructive dialogue among stakeholders on the newly enacted tax provisions affecting special economic zones (SEZs) and free trade zones (FTZs).
According to the Executive Secretary, NEZA, Toyin Elegbede, certain provisions of the new laws, especially as they relate to SEZs and FTZs, pose significant risks to Nigeria’s investment climate.
While commending the Federal Government for enacting the Nigeria Tax Act and the Nigeria Tax Administration Act, Elegbede stressed that the new tax law remains a significant step towards enhancing fiscal transparency and strengthening revenue assurance across the country.
He explained that with the Nigerian tax law provisions, free zone enterprises that do not sell into Nigeria’s customs territory will now be subjected to taxation in an unparalleled and aggressive encroachment.
The new tax provisions for SEZ and FTZ operators have created deep uncertainty among investors, completely undermining the free zone scheme and when implemented, will make Nigeria’s free zones less attractive and competitive, he said.
He dismissed the view held in some quarters that free zones deprive the government of revenue, stressing that all the free zones have made substantial contributions to Nigeria’s economy and fiscal system.
“Under the supervision of the regulatory authorities, free zone operators pay an average of $100,000 per zone (25 fully operational zones under NEPZA and eight under OGFZA) annually in operating licence (OPL) renewal fees, excluding additional renewals by FZEs. They also pay an additional $100,000 per zone yearly in container examination charges.
“In 2024 alone, free zones contributed over N100 billion in customs duties and remitted over N2 billion in PAYE taxes on behalf of employees. They also meet numerous other obligations, including immigration fees, authority administrative fees, and levies,” he said.
He stated that with careful engagement and strategic interventions among stakeholders on the new tax provisions, the risks associated with investor confidence, job losses, capital flight to competing African countries and increasing costs for Nigerian consumers will be avoided.
He emphasised that dialogue has become imperative, particularly at a time when Nigeria is expected to consolidate its leadership of the African Continental Free Trade Area (AfCFTA for competitive advantage.
He therefore urged the Presidency, the Federal Inland Revenue Service, NEPZA, OGFZA and other key stakeholders to engage in a structured and inclusive dialogue with operators to enable them to assess empirical data, design appropriate transitional measures and implement reforms in a manner that preserves investor confidence and safeguards Nigeria’s competitiveness.
