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Administration of Taxes Arising from the Operation of Free Zones
July 27, 2022 @ July 27, 2022 - July 27, 2022
Collaboration in the Administration of Taxes Arising from the Operations of the Free Zones: NEZA’s 2022 Forum with FIRS and NEPZA
In a strategic move to address concerns within the free trade zones tax system, the Nigeria Economic Zones Association (NEZA) convened a pivotal forum in response to the Memorandum of Understanding (MoU) signed by the Federal Inland Revenue Service (FIRS) and the Nigerian Export Processing Zones Authority (NEPZA).
This landmark event, titled “Collaboration in the Administration of Taxes Arising from the Operations of the Free Zones,” took place on July 27, 2022, at the Radisson Blue Anchorage Hotel in Lagos. The forum aimed to reconcile ambiguities within the tax pact and address stakeholders’ reservations regarding tax deductions from free zones and enterprises operating within them.
One of the major outcomes of this forum was the mutual decision to adjust sections of the MoU to accommodate stakeholders’ concerns. This move was prompted by feedback from a diverse array of stakeholders, who expressed those certain aspects of the guidelines conflicted with the NEPZA Act for free zone operators.
Adesoji Adesugba, Managing Director of NEPZA, emphasized the significance of the free trade zone scheme as a potent instrument for economic growth and development. He stated that the forum’s purpose was to make necessary adjustments in how FIRS and NEPZA handled tax-related issues within the free trade zone ecosystem.
The flexibility of the MoU was a central theme during the event, with the stakeholders being given the leverage to call for the amendment of tax guidelines when needed.
Mohammed Nami, Executive Chairman of FIRS, affirmed their commitment to evaluating stakeholder concerns, clarifying that the document provided a flexible guideline for administering the MoU. While some concerns were acknowledged, FIRS reiterated its emphasis on remittances of returns, Value Added Tax (VAT), and Withholding Tax for enterprises with full status in free trade zones.
In a promising development, it was announced that all other issues raised during the forum would be diligently addressed within two months.
Toyin Elegbede, Executive Secretary of NEZA, underscored the forum’s importance in addressing members’ concerns about the tax administration pact between NEPZA and FIRS. He highlighted the positive discussions at the event, expressing optimism about the government’s commitment to supporting Foreign Direct Investment (FDI) through the free trade zone scheme.
The forum boasted an impressive turnout, featuring chief executives of free zones, enterprises, contractors, consultants, and other key stakeholders. It stood as a testament to NEZA’s dedication to fostering collaboration and alignment in tax administration, ultimately contributing to the growth and vitality of Nigeria’s economic zones