Free Trade Zones

Free Trade Zones Contribute to N29 Billion Tax in 2 Years – NEZA

Nigeria Economic Zones Association (NEZA)


The Association of Economic Zones of Nigeria (NEZA) said the country’s Special Economic Zones are not used for tax avoidance but a source of additional revenue through customs duties and VAT than tax on companies.

Recall that the Chairman of the Public Accounts Committee of the House of Representatives, Oluwole Oke, had recently said that more companies were moving to the free zones established by the Nigerian Export Processing Free Zones Authority (NEPZA) and the Oil and Gas Free Zones Authority (OGFZA) to avoid paying taxes.

But in a statement, NEZA executive secretary Toyin Elegbede called the claim false and deliberate misinformation.

Elegbede noted that businesses within the zones operate either as businesses or as service providers and pay their taxes as required by law, stating that Nigeria earns huge sums of money from indirect taxes from free trade zones.

“In fact, Nigeria benefits more from free zones through customs duties and VAT than corporate tax. It is a fact that at the national level, VAT and customs duties are important revenue items. In 2020, despite the COVID-19 problem, the Nigerian Customs Service, Apapa Command, which oversees the Lagos Free Zones, generated over N13 billion in customs duties, while over N16 billion naira were generated in 2021. In fact, the customs department rakes in over 1 billion naira. every month in the free zones on the axis of Lagos only. Where the legislator got his bogus tax return data is unclear.

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He explained that the concept of special economic zones operates within a regulatory framework duly enacted in law which provides that regulatory bodies known as NEPZA and OGFZA license both free zones and the companies operating in them.

“We urge the Hon. Oke for being aware of how his disinformation campaign is undermining the federal government’s efforts to attract foreign direct investment to the country. By early 2022, over $25 billion in investments with over 100,000 direct and indirect jobs have been attracted through the free zone program.