NEZA commends FG over tax reforms, seeks dialogue on impact on Nigeria’s free zones
The Nigeria Economic Zones Association (NEZA) has commended the federal government for enacting the Nigeria Tax Act, 2025, and the Nigeria Tax Administration Act, 2025.
In a statement on Monday, Toyin Elgbede, executive secretary of NEZA, described the tax reforms as important steps towards fiscal transparency and stronger revenue assurance.
However, Elegbede warned that certain provisions of the new laws could have severe consequences for Nigeria’s special economic zones (SEZs) and free trade zones (FTZs), threatening jobs, investment, and competitiveness at a time when the country is positioning itself under the African Continental Free Trade Area (AfCFTA).
He said the reforms, if not carefully implemented, risk eroding investor confidence, jeopardising over 100,000 jobs sustained by the zones, and triggering capital flight to other African countries with more favourable free zone regimes.
“Without constructive engagement and strategic interventions, these reforms could undermine the very objectives of the free zone policy—industrialisation, job creation, and export growth,” the statement reads.
He said the new laws have created uncertainty among investors by subjecting even companies that export 100 percent of their products from the zones to taxation, undermining the free zone scheme.
He added the laws are nullifying exemptions previously granted to firms meeting export requirements under the second schedule of the law.
Elegbede said the laws are imposing unprecedented minimum effective tax rules on multinationals, stripping them of key incentives even when they do not sell into the Nigerian market.
He added that taxing domestic sales from the zones could increase costs for Nigerian consumers and reduce competitiveness.
He cautioned that these changes could drive investors to neighbouring countries while still allowing them to access Nigeria’s market duty-free under AfCFTA, depriving the country of foreign investment, skills transfer, and employment opportunities.
The NEZA executive secretary rejected claims that free zones deprive the government of revenue, noting that in 2024 alone, zones contributed over N100 billion in customs duties and N2 billion in PAYE taxes, alongside various levies and fees.
He added that the broader economic impact of the zones includes infrastructure investment, supply chain linkages, and the creation of over 100,000 direct jobs.
Landmark projects such as the $1.5 billion Lekki Deep Sea Port, the $19 billion Dangote Refinery, and Alaro City’s $1 billion infrastructure investment, Elegbede said, demonstrate how private capital is driving development in Nigeria’s free zones.
However, he faulted the lack of structured engagement with stakeholders before the laws were passed, saying this risks creating “policy misalignment” that could weaken Nigeria’s investment attractiveness compared to countries like Morocco, Kenya, Rwanda, and Ethiopia, which are expanding incentives to strengthen their SEZs.
The association called on the presidency, the Federal Inland Revenue Service (FIRS), NEPZA, and OGFZA to engage in structured dialogue with operators, backed by a temporary moratorium on the new tax provisions.
“A phased approach or transitional framework would provide certainty for investors, protect jobs, and allow government to design reforms that balance revenue objectives with competitiveness,” he said.
He stressed that stability, clarity, and constructive dialogue are critical if Nigeria’s free zones are to remain engines of industrialisation, export growth, and global competitiveness.
