Minister of Industry, Trade and Investment, Okey Enelamah, on Wednesday disclosed that the Nigerian Industrial Council is set to review fiscal arrangements and incentives for operators of Free Trade Zones (FTZs).
According to a statement by Spokesperson of the Ministry, Bisi Daniels, the council is embarking on the review with the view to ensure competitiveness of goods produced in the FTZs in the local and export markets.
Daniels said there are many free trade zones at different stages of development in the country.
He said 14 are operational, 12 under construction, while the development of 11 others is yet to commence.
In addition, six special economic zones are being developed across the geopolitical zones.
Daniels said approved enterprises within Federal Government-owned FTZs are entitled to certain incentives like 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 percent of foreign ownership allowable; and no import or export licences required for operations; among others.
Enelamah, who is also the vice-chairman of the council, said, “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 FTZ operators do not take into cognizance the fact that up to 100% of goods produced in the free zones can be sold into the Nigeria customs territory; 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.
“However, 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.”