The Nigeria Industrial Council and Competiveness Advisory Council has moved to review fiscal arrangements and incentives applicable to the country’s free trade zones (FTZs).
Speaking on last week’s meeting of the council, its Vice Chairman, who is also the Minister of Industry, Trade and Investment, Okey Enelamah, said the council has been working to review the fiscal arrangements and incentives available to operators in the zones vis-a-viz the custom territory with the view to ensuring competitiveness of goods produced in the FTZs in the local and export markets.
There are many free trade zones at different stages of development in the country. Fourteen are operational, 12 under construction, while the development of 11 others has yet to commence, while the ongoing Special Economic Zones project is developing six special economic zones across the geopolitical zones of the country, according to a statement by the Strategy and Media Adviser to the Minister, Bisi Daniels.
Approved enterprises within Federal Government-owned FTZs are entitled to exemption from legislative provisions pertaining to taxes, levies, duties and foreign exchange regulations; full repatriation of foreign capital investment with capital appreciation of the investment at any time; up to 100 per cent of foreign ownership allowable; and no import or export licences required for operations, among others.
Over the years, since the promulgation of the NEPZA Act of 1992, changes have been made to the operational guidelines of the zones.
According to Enelamah, a study by the council has identified some areas that need redress. For example, manufacturers outside the zones have complained about unfair competition as the tax concessions available to the FTZ operators do not take into cognizance the fact that up to 100 per cent of goods produced in the free zones can be sold in the Nigeria customs territory.
Others are inadequate definition of value addition and certification; and cash flow advantage to free zone operators who pay duties on constituent raw materials equivalent of finished goods after production and processing, while manufacturers outside the zones pay duties and other relevant levies upfront.