…As stakeholders back calls for exemption in new tax law

The Oil and Gas Free Zones Authority (OGFZA) has announced that it has attracted more than 24 billion dollars in investments into Nigeria, an achievement that underscores the strategic value of the nation’s free zones. The Authority also threw its weight behind calls for a 10-year exemption for operators in special economic and free zones from the new tax law provisions.

OGFZA’s Managing Director and Chief Executive Officer, Bamanga Usman Jada, made the disclosure during a town hall meeting with the Federal Inland Revenue Service (FIRS) and OGFZA licensees held on Thursday, 11 December 2024, at the Onne Oil and Gas Free Zone in Rivers State.

He argued that the proposed 10-year extension would provide operators with the “adaptation space” needed to transition and comply with evolving tax requirements, noting that Nigeria’s free zones have already generated hundreds of thousands of direct and indirect jobs across the country.

“Distinguished guests, I endorse the appeal presented last week by the Managing Director/CEO of the Nigeria Export Processing Zones Authority (NEPZA) during the stakeholder engagement organized by the Ministry of Industry, Trade and Investment. The request seeks a minimum ten-year exemption for operators in special economic zones and free zones from the new tax provisions, allowing sufficient time for adaptation.”

“Energy-oriented free zones have been pivotal in driving development in numerous nations, exemplified by the Jebel Ali Free Zone in Dubai and the Sohar Free Zone in Oman. These initiatives have drawn billions in investments, generated extensive employment opportunities, and positioned their economies as global leaders.”

“Similarly, OGFZA-regulated free zones in Nigeria have secured over $24 billion in investments, accommodated more than 200 enterprises, and created hundreds of thousands of direct and indirect jobs. This underscores the value of robust incentives and effective regulation in accelerating industrialization.”

“Accordingly, OGFZA supports the call for a ten-year extension of existing tax incentives, coupled with a phased implementation to mitigate potential disruptions. Many of our licensees, including prominent foreign investors, formulate strategies spanning 10, 15, or even 25 years, predicated on prevailing incentives. Granting this transitional period would reinforce the Renewed Hope Agenda and uphold policy consistency, a cornerstone for attracting sustained investment.”

“As the apex regulator of oil and gas free zones and administrator of the one-stop-shop framework, OGFZA remains integral to their enduring viability. Our efforts have been recognized through prestigious accolades, including the Best Federal Agency on Ease of Doing Business award from the Presidential Enabling Business Environment Council (PEBEC) in 2018, 2019, 2022, and 2024, as well as the Financial Times' FDI Magazine designation as the best specialized free zone in 2018.”

The OGFZA helmsman commended the President of Nigeria, Bola Ahmed Tinubu for what he described as “his visionary leadership,” even as he thanked the Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, and the Minister of State, Senator John Enoh, for “their steadfast guidance and advocacy in supporting the sector.”

Under the leadership of President Bola Ahmed Tinubu, “exports from Nigeria's oil and gas free zones have surged to 496,537,804 metric tons, generating substantial foreign exchange inflows. Our operators now supply markets in Brazil, the United States, France, India, the United Kingdom, the Republic of Korea, and beyond, aligning seamlessly with the President's Renewed Hope Agenda.”

He reiterated OGFZA’s readiness to “sustain collaboration with FIRS, in accordance with our memorandum of understanding, to ensure the tax reforms are executed efficiently and equitably.”

Speaking at the event, Executive Chairman of FIRS, Dr. Zacch Adedeji argued that “the 2025 tax reforms mark a significant step in modernizing Nigeria’s fiscal frameworks.”

“For Export Processing and Free Trade Zones, the focus is not on taxation of income or profits of Zone entities, but on promoting transparency, accountability and proper reporting. By embracing compliance, collaboration and commitment to respecting obligations imposed by relevant tax laws, Free Trade zones can meaningfully contribute to national development, which is the very essence for implementing the Special Economic zones scheme,” he explained.

Represented by the Special Adviser on Tax Incentive Management, Dr. Cletus Adie, the FIRS boss condemned what he described as “continuous recalcitrant behaviours of some enterprises”, that have “motivated the deployment of a deliberate and structured administrative strategy that compels compliance by all enterprises, supported by section 72 (4) (f ) of the Nigerian Tax Administration Act. Accordingly, the need for the implementation of tax clearance certificate as a mandatory requirement for issuance of renewal of operating license has become crucial”, he stressed.

Stakeholders at the event unanimously called for the exemption for operators in special economic and free zones from the new tax law provisions, to enable them adjust.

Highlights of the event were special presentations, interactive, as well as question and answer session, among others.

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