The Nigeria Export Processing Zones Authority (NEPZA), says there are presently 46 private Free Trade Zones (FTZs) with a culminating investment value standing at 30 billion dollars
Prof. Adesoji Adesugba, the Managing Director, NEPZA said this on Sunday in Abuja.
According to him, the free trade zones scheme has cumulative investment of N14.1 trillion.
Adesugba, while speaking on the success recorded by NEPZA in its drive to attract investors to Nigeria, said it also attracted one billion dollars investment to Niger State through Hydropolis FTZ in Kainji in 2022.
He said that the impact of the scheme was being seriously felt in the country’s Gross Domestic Product (GDP) and attraction of Forex.
“For instance, we have at the moment, 500 enterprises operating in these zones providing a total of 100,000 direct jobs and more than 170, 000 indirect jobs for the country’s teeming youth population.
“The authority has in the last two and half years developed the right strategy plan to put the scheme at the front-burner of global competitiveness,’’ the NEPZA boss said.
He said the Federal Government approved six public Special Economic Zones (SEZs) within seven years as against two that had existed for 30 years.
Adesugba said the number of registered private free trade zones also increased to 44 while 500 functional enterprises were attracted to the zones.
According to him, there are construction of the Deep-Sea Port at Lagos FTZ and construction of Dangote Refinery at the Dangote free zone enterprises in Lagos.
“There are on-going development of Medical special economic zone, Lekki, development of Agro-Allied special economic zone, Ilorin and development of Integrated Cotton and Garment special economic zone, Funtua, Katsina State,’’ he said.
The managing director, however, said that with its highly proficient workforce it had increased investment prospecting and promotion.
This, he said led to the desired attraction of Foreign Direct Investments (FDIs) and Local Direct Investments (LDI) respectively.
He said that NEPZA) was in collaboration with FIRS on tax administration to promote smooth tax operations in free trade zones in the country.
NEPZA in June 2022 signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Services (FIRS) for effective administration of taxes in the free trade zones.
According to Adesugba, it is ensuring effective administration of taxes applicable in the operation of zones under NEPZA.
He said that the collaboration recorded cumulative free zones’ investment of 30 billion dollars while contributing more than N40 billion to the country’s Gross Domestic Product (GDP) in 2022.
Adesugba also said that the agreement had corrected the wrong notion that enterprises in zones do not pay tax at all.
“This widely held notion remains misplaced.
“The MoU on tax administration was to ensure the adherence of Section 19 of the NEPZA Act which mandates free zones enterprises to file returns for statistical and record purposes.
“Such information makes public the records of sales, purchases and other key operations of the enterprises as the Authority may require from time-to-time. This requirement is also contained in the Finance Act of 2022,’’ he said.
Adesugba also said that Section 8 of the Act approves those enterprises operating in zones to be exempted from all federal, state, and local government’s taxes, levies and rates.
“However, they are under obligations to pay all deferred taxes, including duties when they extend their transactions to the customs territory.
“So, the widely held notion that enterprises in zones do not pay tax at all remained misplaced.
“The new understanding which led to the signing of the MoU has corrected this wrong notion.
“For instance, the personnel of the over 500 enterprises that operate in the 46 free zones are dutifully complying with PAYE tax.
“These monies are automatically generated and paid to the FIRS in the locations they work,’’ Adesugba said.
He said that NEPZA ensured the new schedules were followed strictly.
NEPZA said the Free Trade Zones (FTZs) Scheme generated a total of N35.1 billion for government as Customs Duty in 2021.
The authority said the sum of N408.3 million was also remitted as Pay As You Earn (PAYE) taxes in 2021.
Adesugba said NEPZA ensured effective generation of customs duty and administration of taxes applicable in zones operation.
PAYE tax is one of the vital types of taxes in Nigeria that individuals pay to the Federal Inland Revenue Service (FIRS) within their respective state of residence.
Section 19 of NEPZA Act mandates FTZs enterprises to file returns for statistics and data, while section 8 stipulates that enterprises operating in zones should be exempted from federal, state and local government taxes.
However, they are under obligations to pay all deferred taxes and duties when they extend their businesses to the customs territories.
The NEPZA boss further said that the scheme also generated a total of 19,125 employments in 2021
According to him, a total of 3,000 jobs skills have so far been transferred to Nigerians in 2021.
The managing director explained that the Federal Government approved the establishment of the Special Economic Zones Security (SEZSEC) to be operated by NEPZA.
He said it was for the very reason of creating a viable revenue option to reduce over-dependency on the downstream sector that the Nigerian government adopted the FTZ scheme and created NEPZA with an Act 63 of the parliament in 1992 to regulate and manage it.
“I can confidently say that the authority has done well in the actualisation of its mandate.
“We have experienced a turnaround in the last seven years of President Muhammadu Buhari’s administration as he continues to show commitment and passion through the Federal Government’s unflinching support for the success of the scheme.
“For instance, in 2017, the present administration buttressed the role of special economic zones in Nigeria’s industrialisation agenda under the Economic Recovery and Growth Plan (ERGP),’’ he said.
He said the SEZ model was used to accelerate implementation of the Nigerian Industrial Revolution Plan (NIRP), a four – year road map on industrialisation to create jobs and promote exports, which in turn would facilitate economic growth.