The Nigerian Industrial Council is set to review fiscal arrangements and incentives for operators of free trade zones (FTZs) in the country.Nigeria’s Minister of Industry, Trade and Investment, Mr. Okechukwu Enelamah, said in a statement on Wednesday in Abuja that the council was embarking on the review with the view to ensuring competitiveness of goods produced in the FTZs in the local and export markets.
He noted that there are many free trade zones at different stages of development in the country and that 14 are operational, 12 under construction, while the development of 11 others is yet to commence.
According to the statement, six special economic zones are being developed across the geopolitical zones of the country.
He explained that approved enterprises within the federal government-owned FTZs are entitled to certain incentives like exemption from legislative provisions pertaining to taxes, levies, duties and foreign exchange regulations.
Others are full repatriation of foreign capital investment with capital appreciation of the investment at any time, up to 100 percent of foreign ownership allowable; and no import or export licences required for operations; among others.
The minister, who is also the vice chairman of the Council said that a study by the council identified some areas that need to be addressed.
For instance, manufacturers outside the zones have complained about unfair competition as the tax concessions available to FTZ operators do not take into cognizance the fact that up to 100 percent of goods produced in the free zones can be sold into the Nigerian customs territory.
It also identified inadequate definition of value addition and certification; 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.
He noted that in the study, free zone operators raised concerns over their inability to effectively compete in the export market, high administrative charges on turnover and exclusion from export incentives.