NEPZA, FIRS collaboration promoting smooth tax operations in free trade zones—Adesugba
The Nigeria Export Processing Zones Authority (NEPZA), says the Authority’s collaboration with FIRS on tax administration is promoting smooth tax operations in free trade zones in the country.
The Managing Director/Chief Executive of NEPZA, Prof. Adesoji Adesugba said this in an interview with the News Agency of Nigeria (NAN) on Sunday in Abuja.
It would be recalled that NEPZA had in June 2022 signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Services (FIRS) for effective administration of taxes in the free trade zones.
According to Adesugba, it is ensuring effective administration of taxes applicable in the operation of zones under NEPZA.
He said that the collaboration recorded cumulative free zones’ investment of 30 billion dollars while contributing more than N40 billion to the country’s Gross Domestic Product (GDP) in 2022.
Adesugba also said that the agreement had corrected the wrong notion that enterprises in zones do not pay tax at all.
“This widely held notion remains misplaced.
“The MoU on tax administration was to ensure the adherence of Section 19 of the NEPZA Act which mandates free zones enterprises to file returns for statistical and record purposes.
“Such information makes public the records of sales, purchases and other key operations of the enterprises as the Authority may require from time-to-time. This requirement is also contained in the Finance Act of 2022,’’ he said.
Adesugba also said that Section 8 of the Act approves those enterprises operating in zones to be exempted from all federal, state, and local government’s taxes, levies and rates.
“However, they are under obligations to pay all deferred taxes, including duties when they extend their transactions to the customs territory.
“So, the widely held notion that enterprises in zones do not pay tax at all remained misplaced.
“The new understanding which led to the signing of the MoU has corrected this wrong notion.
“For instance, the personnel of the over 500 enterprises that operate in the 46 free zones are dutifully complying with PAYE tax.
“These monies are automatically generated and paid to the FIRS in the locations they work,’’ Adesugba said.
He said that NEPZA ensured the new schedules were followed strictly.
“And to that extent, the MoU has been effective.
“If otherwise, the Authority wouldn’t be in the position to manage the cumulative free zones’ investment of 30 billion U.S. dollars while also contributing over N40 billion to the country’s GDP as at 2022. ’