The proposed tax reform bills under President Bola Tinubu’s administration have sparked controversy, with stakeholders warning that Nigeria’s Free Trade Zones (FTZs) face extinction.
Tony Elegbede, Secretary of the Nigeria Economic Zones Association, raised concerns that investors in FTZs may relocate to Ghana, Benin, and other neighboring countries if the reforms are implemented. Speaking on Arise TV, he criticized the tax bill for eliminating incentives previously granted under the Nigeria Export Processing Zones Authority (NEPZA) and Oil and Gas Free Zones Authority (OGFZA).
The Nigeria Tax Bill 2024 proposes mandatory miimum tax rates and removes tax exemptions for free zone enterprises. The tax committee argues that this move will create a level playing field between FTZ operators and manufacturers in the Nigerian
FTZ Operators Warn of Economic Consequences
Elegbede stressed that Free Trade Zones have contributed to Nigeria’s economy for 30 years, fostering economic growth, attracting foreign direct investment, and creating jobs. He warned that passing the bill would lead to:
Mass job losses
Capital flight
Investor relocation to friendlier markets
Elegbede also alleged that Taiwo Oyedele, Chairman of the Presidential Tax Reform Committee, lacks a deep understanding of FTZ operations. He claimed Oyedele only engaged with FTZ investors for the first time at a recent annual meeting in Lagos, suggesting inadequate consultation before drafting the tax bill.
“If this bill is passed as it is, we are saying goodbye to Free Trade Zones in Nigeria,” Elegbede warned.
Stakeholders continue to push for a reconsideration of the tax proposals, emphasizing the long-term economic risks.
