By Onome Amuge.
The Federal Inland Revenue Service (FIRS) and Nigerian Export Processing Zones Authority (NEPZA) have agreed to adjust some sections of the recently signed Memorandum of Understanding (MoU) on the efficient management of the free trade zones tax system.
The development is in response to the tax pact signed by both agencies in June 2022 to reconcile all grey areas in the administration on issues bordering on tax deductions from free zones and enterprises operating in the zones.
According to a statement signed by Martins Odeh, head of corporate communications, NEPZA, the agreement to adjust the MoU is aimed at accommodating salient concerns of the stakeholders who were presented with the documents at a forum in Lagos.
A cross section of the stakeholders had, prior to the adjustment, raised concerns on some sections of the guidelines, noting that those sections contravened some provisions of the NEPZA Act for operators in the free zones.
Adesoji Adesugba, managing director, NEPZA, explained that the meeting was to make adjustments where necessary on how the FIRS and NEPZA would treat tax issues relating to business interactions within the free trade zone ecosystem.
He noted that section 5 of the MoU had given parties the leverage to call for the amendment of the tax guidelines when necessary.
“We have always insisted that the free trade zone scheme must be allowed to succeed as that truly remains a potent economic instrument for widespread growth and development,” Adesugba said.
“Therefore, we have agreed to adjust the tax pact to capture some of the salient concerns of the stakeholders,” he said.
Mohammed Nami, executive chairman of the FIRS, who had promised to evaluate the concerns of the stakeholders, said the document was a flexible guideline on how to administer the MoU.
Nami, represented by Mathew Gbonjubola, FIRS coordinating director, said that not all the concerns raised were genuine, adding that the FIRS was knowledgeable enough on issues around free trade zone tax administration.
He explained that the service would not unduly interrogate tax remittances of enterprises with full status of free trade zones but it would, however, always insist on remittances of returns, Valued Added Tax (VAT), and Withholding Tax.
Nami further noted that all other issues raised on the tax pact would be addressed within two months.
Toyin Elegbede, executive secretary, Nigeria Economic Zones Association, noted that the forum became imperative to address the concerns of its members on the tax administration pact signed between NEPZA and FIRS.
According to Elegbede, the discussions at the forum elicited hopes and assurances on the commitment of the government to support the inflow of Foreign Direct Investment (FDI) through the free trade zone scheme.
The forum was attended by chief executives of free zones, enterprises, contractors, consultants and other key stakeholders.