NEPZA, Binance in Partnership on Virtual Free Zones in West Africa

CAPTION:

L – Nadeem Ladki (Binance Executive Director-Regional Strategic Partnerships), Professor Adesoji Adesugba (NEPZA MD/CEO), Sameera Kimatrai (Binance Senior Legal Counsel), Luqman Edu (CEO Talent City), Sikiru Lawal (NEPZA Director)

 

By Favour Nnabugwu

 

 

The Nigeria Export Processing Zones Authority (NEPZA) is in partnership with Binance and Talent City for Nigeria to harbour the first Virtual Free Zone in West Africa.

NEPZA’s Managing Director, Prof.  Adesoji Adesugba stated this in Dubai, United Arab Emirates after holding meetings with officials of the two firms on Friday.

Adesugba, also Chief Executive Officer of the Authority, explained that the partnership when agreed would be similar to the Dubai Virtual Free Zone.

The NEPZA boss presented the vision of his management which centres on expanding frontiers of innovations in the operations and management of free zones in Nigeria and Africa as a whole.

” We seek to break new grounds to widen economic opportunities for our citizens in line with the mandate of the Authority, the directive of the Honourable Minister and the economic development agenda of President Muhammadu Buhari. Our goal is to engender a flourishing virtual free zones to take advantage of a near trillion dollar virtual economy in blockchains and digital economy,” Adesugba said.

Binance, a leading global digital, blockchain finance services firm operating worldwide with billions of dollars in operating capitalisation, was represented at the parley by Nadeem Ladki, its Executive Director, Regional Strategic Partnerships and Sameera Kimatrai, Binance Senior Legal Counsel.

NEPZA, FIRS agree to adjust FTZs new tax system

By Favour Nnabugwu

 

The Nigeria Export Processing Zones Authority (NEPZA) and the Federal Inland Revenue Service (FIRS) 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 in order to accommodate salient concerns of the stakeholders.

The Managing Director, NEPZA,. Mr. Adesoji Adesugba, explained that the event 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.

“The Authority’s recent diplomatic advances with sisters agencies, especially, the FIRS can only be described as a game changer. We now see ourselves as partners in progress.

“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.

“Therefore, we have agreed to adjust the tax pact to capture some of the salient concerns of the stakeholders.
“The Authority will not sheer away from protecting the scheme and those who have invested billions of dollars in the scheme. We are delighted that the FIRS has become our advocate in this regard.

” We are also happy that the administration of President Muhammad Buhari has given us the impetus through his favourable policies to deepen the growth of the scheme,” he said.

Recall that the agencies on June 7 signed the tax pact to reconcile all grey areas in the administration on issues bordering tax deductions from free zones and enterprises operating in the zones respectively.
The agreement to adjust the MoU was reached on Wednesday during a roundatable where the document was formally presented to the stakeholders in Lagos.

A cross section of the Stakeholders had raised concerns on some sections of the guidelines as according to them, those sections contravened some provisions of the NEPZA Act for operators in the free zones.

The Executive Chairman of the FIRS  Alhaji Mohammed Nina had promised to evaluate the concerns of the stakeholders, adding the document was a flexible guideline on how to administer the MoU.

Represented by Mr Mathew Gbonjubola, the Coordinating Director of the service, Nina said that not all the concerns raised were genuine, adding that the FIRS was knowledgeable enough on issues around free trade zone tax administration.

Nina explained that the service would not unduly interrogate tax remittances of enterprises with full status of free trade zones, adding that the service would, however, always insist on remittances of returns, Valued Added Tax (VAT), and Withholding Tax, respectively.

He further noted that all other issues raised on the tax pact would be addressed within two months.

On his part, Chief Toyin Elegbede, the Executive-Secretary of the Nigeria Economic Zones Association (NESA), said that the forum became important to address the concerns of his members on the tax administration pact signed between NEPZA and FIRS.

According to him, “The discussions from forum elicited hopes and assurances on the commitment of government to support the in-flow 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.

NEPZA, FIRS collaborates to clear misconception of free trade zones

By Favour Nnabugwu

 

 

The collaboration between the Nigeria Export Processing Zones Authority (NEPZA) and Federal Inland Revenue Service (FIRS) will clear every misconception of the Free Trade Zones.

The Managing Director of the Nigeria Export Processing Zones Authority (NEPZA, Prof. Adesoji Adesugba has said that the new tax pact with the Federal Inland Revenue Service (FIRS) was aimed at enhancing better understanding of the Free Trade Zones Scheme’s tax-exempt index so as to end the long years of unbridled suspicion over its implementation.

Adesugba stated this in his address during the signing of the Memorandum of Understanding (MoU) on the new tax administration at the Headquarters of the FIRS in Abuja.

He said that all stakeholders require a deeper understanding of the importance of the Special Economic Zones scheme and its incentives, adding that such understanding would stimulate the needed competition and development of the scheme.

“With this pact there will be no more arbitrary freezing of bank accounts of any of our enterprises or uncontrolled entering of the zones to harass them without permission of the Authority and collaborative understanding of FIRS.

“The MoU is also to streamline grey areas and get the two agencies to complement each other’s statutory mandates.

“Before now, when we were supposed to speak with one voice towards the same goal, we would choose to sing discordance tunes,’’ Adesugba noted.

The NEPZA boss also explained that there was no gainsaying that the FIRS remained one of the key revenue drivers, but noted that NEPZA had the regulatory mandate to attract investment through the scheme with approved incentives as sweeteners.

“The idea is to simply encourage investors to those business enclaves for the purposes of creating backward linkages, employments, skills transfer and technology transfer among others without the usual bureaucratic bottleneck associated with doing business in the customs territory.

“This MoU is, however, not new, as there has been an existing tax schedule for the free trade zone. Today’s exercise only aims at unbundling and strengthening this schedule for compliance purposes in line with Section 19 of the NEPZA Act.

“The Section 19 of the NEPZA Act mandates free zones enterprises to file “Returns’’, for statistical and data monitoring. Such information makes public the records of sales, purchases and other key operation of the enterprises as the Authority may require from time-to-time. This requirement is also contained in the Finance Act of 2022.

“It is important to state that Section 8 of the NEPZA Act approves those enterprises operating in zones to be exempt from all Federal, State, and Local Governments taxes, levies and rates. However, they are under obligations to pay all deferred taxes, including customs duties when they extend their businesses to the customs territory.

“ So, the widely held notion that enterprises in zones do not pay taxes at all remained misplaced. This new understanding is expected to correct this wrong notion. For instance, the personnel of the over 500 enterprises that operate in the 22 active zones across the country religiously comply with PAYE tax,’’ Adesugba said.

The managing director further said that the importance of the country’s zone scheme in growing the nation’s economy could not be overemphasized, noting that the Authority has through the management of the zones attracted a cumulative investment of 22 billion US dollars and generated over N40 billion as Gross Domestic Product (GDP) for the country.

According to him, the scheme comes with huge prospects and challenges, adding that, efforts were been put in to ignite robust performance of the scheme.

“ We are, therefore committed to ensuring that this new understanding with this very important sister agency is strictly respected and followed to the latter,’’ Adesugba said.

Mr Muhammad Nami, the Executive Chairman, FIRS said NEPZA’s mandate in attracting both the Foreign Direct Investment and Local Direct Investment placed it as an important agency to drive the country’s industrialization.

Nami, however said the public must appreciate the mandate of the FIRS that basically geared toward the collection of revenues to be used by government for the good of the citizens, adding that the collaboration is required to set the country’s tax records straight.

The executive chairman further said that the new pact would assist both agencies to always present statistical records of tax returns, and custom duties timeously to help in both budgetary and economic planning.

On her part, Deputy Comptroller-General of the Nigeria Customs Service in charge of the Free Trade Zone, Mrs Catherine Ekekezie, expressed delight in the pact struck by the two agencies.

Ekekezie explained that the perceived misunderstanding of the operations of the zone scheme stemmed from lack of in-depth knowledge of the laws and regulations that guided the scheme, adding that agencies of government could only work harmoniously when they took time to study sisters’ agencies’ Acts, rules and regulations.

“We have always collected duties on goods that are manufactured or assembled or stored in the free zones imported to the customs territory. However, we are happy to be given the opportunity to witness this collaboration between FIRS and NEPZA on tax matters.

“The free trade zones may be a fairly new thing here but we are all learning very fast and we believe if allowed to mature, will become the country’s cash cow,’’ Ekekesie