The Nigeria Economic Zones Association (NEZA) has welcomed the federal government’s recent tax reforms but called for urgent and constructive dialogue on certain provisions that could undermine the competitiveness of Nigeria’s Special Economic Zones (SEZs) and Free Trade Zones (FTZs).
Speaking on the matter, NEZA’s Executive Secretary, Toyin Elegbede, commended the government for enacting the Nigeria Tax Act, 2025 and the Nigeria Tax Administration Act, 2025, describing them as “a significant step towards enhancing fiscal transparency and strengthening revenue assurance across the country.”
However, Elegbede warned that aspects of the new tax provisions targeting free zone enterprises pose “significant risks to Nigeria’s investment climate.” He explained that, under the new framework, even enterprises that do not sell into Nigeria’s customs territory will now be subjected to taxation, which he described as “an unparalleled and aggressive encroachment.”
According to him, these provisions have created deep uncertainty among investors, threatening to erode the attractiveness of Nigeria’s free zones and potentially making them among the least competitive in Africa.
“The perception that free zones deprive government of revenue is inaccurate,” he said.
“Under the supervision of the regulatory authorities, free zone operators pay an average of $100,000 per zone annually in operating licence renewal fees, in addition to $100,000 in container examination charges.
“In 2024 alone, free zones contributed over N100 billion in customs duties and remitted over N2 billion in PAYE taxes on behalf of employees, alongside other obligations such as immigration fees, administrative levies, and authority charges.”
Elegbede stressed that constructive engagement with stakeholders is essential to avoid adverse consequences such as investor flight, job losses, capital diversion to other African markets, and rising costs for Nigerian consumers. “Dialogue has become imperative, particularly at a time when Nigeria is expected to consolidate its leadership of the African Continental Free Trade Area for competitive advantage,” he noted.
He urged the Presidency, the Federal Inland Revenue Service (FIRS), the Nigeria Export Processing Zones Authority (NEPZA), the Oil and Gas Free Zones Authority (OGFZA), and other stakeholders to engage in structured dialogue with operators. Such engagement, he argued, would help assess empirical data, design appropriate transitional measures, and implement reforms in a way that preserves investor confidence while safeguarding competitiveness.
NEZA also appealed to the government to consider a moratorium on implementing the new tax provisions for free zone enterprises. According to Elegbede, such a moratorium would provide temporary relief, allowing investors to protect jobs, honour financing commitments, and complete long-term projects. “What is needed now is stability, policy clarity, and constructive engagement underpinned by a well-considered moratorium. This approach is essential to ensure that Nigeria’s free zones continue to serve as engines of growth, industrialisation, and global competitiveness,” he said.
He pointed to the transformative potential of well-managed zones, citing global benchmarks. “In 2023, the port handled 8.61 million TEU, with its industrial zones hosting about 1,200 companies, generating 110,000 jobs and $15 billion in exports. It is now on track to exceed its nominal capacity of 9 million TEU. This is what strategic, coordinated investment combined with policy stability can deliver. Nigeria has the potential to replicate and even surpass such success, but only if the free zone framework is protected and strengthened,” he added.
While acknowledging concerns raised by the Manufacturers Association of Nigeria (MAN) about an uneven playing field for businesses in the customs territory, Elegbede insisted that SEZs were created to attract foreign direct investment, drive exports, and generate jobs. He urged the government to strengthen SEZs as critical platforms for AfCFTA exports.
“Rather than weakening the free zone scheme, what is required is fair and transparent rules that balance the interests of manufacturers in the customs territory with the export-driven mandate of free zones,” he advised.
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