The Nigeria Export Processing Zones Authority (NEPZA) has signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Service (FIRS) for the effective administration of taxes in the free trade zones.
Signing the MoU on Tuesday in Abuja, the Executive Chairman of FIRS, Muhammad Nami, said that the importance of the agreement was to foster greater collaboration between the two agencies.
According to Nami, the intention is to promote the smooth operation of activities or approve enterprises in the zones and ensure effective administration of taxes applicable in the operation of zones under NEPZA.
Nami said that FIRS would have access to the zones to conduct tax compliance checks at periodic intervals in line with the MoU. According to him, if there are any challenges, they would be resolved with the speed of cordiality.
On his part, the Managing Director of NEPZA, Prof. Adesoji Adesugba, said that the MoU aimed at unbundling and strengthening the tax schedule for compliance purposes in line with section 19 of the NEPZA Act.
He said that section 19 of the NEPZA act mandates free zone enterprises to file returns for statistical data.
Adesugba said that section 8 of the NEPZA Act approved that enterprises operating in zones should be exempted from all federal, state, and local government taxes, levies, and rates.
“However, they are under obligations to pay all deferred taxes, including duties when they extend their businesses to the custom territories. So, the widely held notion that enterprises in the zones do not pay tax all remained misplaced.
“For instance, the personnel of the over 500 enterprises that operate in the 42 zones across the country religiously comply with PAYE tax. The monies are automatically generated and paid to the FIRS in the locations they work,’’ Adesugba said. (NAN)