Amid the Federal Government’s proposed tax reforms targeting tax imposition on Free Trade Zones (FTZs), the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) has warned that the decision could drive away over $200 billion in foreign direct investments (FDIs) from the country, and jeopardise more than 600,000 jobs.
The contentious provisions, outlined in the Nigeria Tax Bill 2024, seek to introduce minimum tax rates and remove long-standing tax exemptions for businesses operating within FTZs, a move seen as contradicting Nigeria’s industrialisation and investment objectives.
NACCIMA, in a strongly worded statement by its National President, Dele Oye, Esq., expressed grave concern over the proposed amendments, particularly Sections 57, 60, 198(2), and 198(3), which threaten to dismantle key incentives that have sustained FTZ investments since the scheme was introduced through the Nigeria Export Processing Zones Act in 1992.
“Stripping away established tax exemptions is a drastic measure that will diminish investor confidence and jeopardize Nigeria’s standing in the global investment community,” said Oye, who is also the Chairman of Nigeria’s Organised Private Sector (OPS).
Since the inception of the FTZ scheme in 1992 through the Nigeria Export Processing Zones Act, businesses operating in these zones have significantly contributed to Nigeria’s economic landscape.
With special tax incentives, these zones were designed to attract investment, promote job creation, and foster industrialisation.
Sections 8 and 18 of the NEPZA Act explicitly exempt approved enterprises from all Federal, State, and Government taxes, creating an attractive investment environment.
