The director general of Manufacturers Association Of Nigeria (MAN) Segun Ajayi-Kadir, has expressed support for the proposed reform of free-trade zone operations in Nigeria.

The reform aims to clarify tax incentives and ensure equitable treatment for companies operating within and outside the zones.

Currently, companies operating within the zones are exempt from federal, state, and local government taxes, but this exemption only applies to approved enterprises operating within the zone. Sales to the customs territory are not exempt from taxes, but rather subject to regulatory permits.

Ajayi-Kadir emphasized that the proposed reform is not a reversal of incentives but rather a clarification to align with the intent and letters of the enabling laws. He noted that Nigeria’s free trade zones have attracted significant investments, and the proposed amendments will ensure equitable tax treatment for companies operating in the customs territory and those licensed to operate within the free zones.

Interestingly, Nigeria’s free trade zones have more generous policies compared to other countries. For instance, Ghana only allows up to 30% sales into the customs territory, subject to payment of duties and taxes, including CIT. Nigeria, on the other hand, allows 100% sales, with indefinite tax exemption on exports.

The proposed reform has been met with opposition from some free zone operators, who claim that the changes will destroy the attractiveness of free zones and result in massive capital flight and job losses

However, Ajayi-Kadir believes that the reform will promote fair competition and protect the country’s tax base.

The Association was founded in 1971 as a company limited by guarantee. The Association is known for its promotion of made in Nigeria products as a catalyst for industrialization and economic prosperity in Nigeria.