Business
MAN Articulates Benefits of Amending FTZs Tax Bill
An example that is not farfetched is the situation in nearby Ghana. Ghana only allows up to 30% of sales into the customs territory subject to payment of duties and taxes, including CIT.
The Manufacturers Association of Nigeria (MAN) said on Tuesday that the National Assembly should go on with the proposed reform of the free-trade zone operations in the country.
The leadership of the MAN expressed their conviction that the amendments will ensure equitable tax treatment for companies operating in the customs territory and those licensed to operate within the free zones with respect to sales into the customs territory, thereby enabling fair competition while protecting the country’s tax base.
In the position statement, signed by the association’s Segun Ajayi-Kadir, Director-General, MAN noted that licensed entities will also enjoy similar incentives available to entities within the customs territory with respect to their sale of goods and services into the Customs Territory, a win-win outcome.
“It is important for us to situate this conversation within the context of what export processing zones and export free trade zones were created to achieve and the value they are purposed to deliver to the economy.
It is clear from the enabling laws and in the 3rd Schedule to the NEPZA Act with the first listed approved activity stated as “manufacturing of goods for export”, while other activities relate to international services, transshipment and services within the zones.
The emphasis here is “within the zones,” he said.
He argued that for instance, banking is listed as an approved activity but it does not mean that a bank can set up in the zone and render banking services across Nigeria without paying taxes, rather it refers to banking within the zone and exports.
So, this should explain how other activities (apart from manufacturing for export) should be viewed.
“The concern of my members and the contention here are obviously pertaining to tax incentives.
In specific terms, Section 8 on exemption from taxes only applies to approved enterprises operating within a Zone.
They are exempted from all Federal, State and Local Government taxes, levies and rates. Sales to the customs territory is neither an approved activity nor is it within the zone.
“However, section 18 permits the sale of goods and services to the customs territory, but this does not confer tax exemption on the sales, but rather a regulatory matter regarding what is permissible.
“Over time, the provisions of sections 8 and 18 have been misinterpreted as not only permitting the sale into the customs territory but also as tax exemption.
“So again, I say this is where the concern of my members and the contention lies: This position is not consistent with the law and it undermines tax-paying entities operating within the customs territory and producing similar goods and services.
Where does the tax exemption enjoyed by the companies operating within the zones, leave my more than 2,500 members who operate outside the zone, in terms of level playing field, competitiveness, fairness and equity?
They find themselves in a disadvantaged position and are rendered less competitive”, he stated.
Ajayi-Kadri said that he believed that the tax reform bill before the National Assembly has actually come to the rescue.
“The bill seeks to bring clarity and equity by stating that sales to the customs territory are taxable, not just for import duties and VAT, but also for CIT purposes.
That is to say that all sellers in the customs territory should be subject to the same tax obligations.
“Subsequently, I don’t think the relevant provisions of the tax reform bill amount to a reversal of the incentives, not at all. It is actually a clarification to align with the intent and letters of the enabling laws.
This is in line with global best practice for free zones. In fact, Nigeria will continue to be more generous even after the proposed amendments.
An example that is not farfetched is the situation in nearby Ghana. Ghana only allows up to 30% of sales into the customs territory subject to payment of duties and taxes, including CIT.
Whereas we allow 100% sales. Exports by a zone entity are tax-free only for 10 years after which up to 8% CIT will apply. Nigeria offers indefinite tax exemption on exports.”
The National Union of Petroleum and Natural Gas Workers (NUPENG) says it is engaging the Lagos State Government to resolve the ongoing issue of towed trucks.
It said that the negotiation aims to prevent disruptions in fuel distribution, which could lead to widespread scarcity.
In an interview on Tuesday in Lagos, General Secretary, NUPENG, Mr Olawale Afolabi, explained that the union had withdrawn its services in response to the recent attacks and arrests of tanker drivers by security personnel from the Lagos State Government.
Afolabi reassured that the situation would be resolved with the state authorities and that the towed trucks would be released to the union as promised by the government.
On Feb. 22, the Lagos State Task Force towed away several trucks and arrested several members of the Petroleum Tanker Drivers (PTD) Association, a branch of NUPENG, near the Dangote Refinery in Ibeju-Lekki for parking on the highways.
Afolabi added that a meeting is ongoing between NUPENG and the Lagos State Government, with both parties hopeful of reaching an agreement that will enable depot operations to resume.
He, however, said that the outcome of these talks remains uncertain, and stakeholders are eagerly awaiting further updates.
Similarly, Mr Tayo Aboyeji, the Chairman of NUPENG, Lagos branch, confirmed that the service withdrawal was in response to the mistreatment and arrest of tanker drivers by security personnel.
He clarified that the union had previously instructed drivers not to operate at night to avoid accidents and hijackings.
He said that in spite of this, drivers who stopped to rest were reportedly targeted by security officers.
“We had instructed tanker drivers not to travel at night to avoid accidents and hijackings.
“But when drivers parked to rest, security personnel towed their vehicles, arrested our members, and even damaged the union’s patrol vehicle,” Aboyeji said.
He added, “As a result, we decided to suspend services in the state until the government is ready to provide a safe and convenient space for tanker drivers, ensuring that such incidents do not occur again.”
Aboyeji assured that the national leadership of the union is in talks with the state government and that the matter would be resolved once discussions are concluded.
“There are ongoing discussions, and if they are completed today or tomorrow, the issue will be resolved,” he stated.
The National Bureau of Statistics (NBS) has reported that Nigeria’s annual gross domestic product (GDP) grew by 3.84 per cent in the fourth quarter (Q4) of 2024, compared to 3.46 per cent in Q3 2024 and 3.46 per cent in Q4 2023.
According to the NBS report, the GDP growth was primarily driven by the services sector, which expanded by 5.37 per cent and contributed 57.38 per cent to the overall GDP.
“The agriculture sector grew by 1.76%, from the growth of 2.10% recorded in the fourth quarter of 2023,” the report stated.
In contrast, “The growth of the industry sector was 2.00%, a decline from 3.86% recorded in the fourth quarter of 2023.”
The services sector’s contribution to the aggregate GDP in Q4 2024 was higher compared to the same quarter in 2023.
Overall, the annual GDP growth for 2024 was 3.40%, up from 2.74% in 2023.
The NBS also reported that the nominal GDP reached N78.37 trillion in Q4 2024, compared to N65,908,258.59 million in Q4 2023, representing a year-on-year nominal growth of 18.91%.
Oil Production Drops, Non-Oil Sector Contributes Significantly
The NBS report indicated that Nigeria’s average oil production in Q4 2024 was 1.54 million barrels per day (mbpd).
This is “0.03million bpd lower” than the Q4 2023 production volume of 1.56mbpd and “0.06mbd higher than the daily average production of 1.47mbpd recorded in the third quarter of 2024”.
“The real growth of the oil sector was 1.48% (year-on-year) in Q4 2024, indicating a decrease of 10.64% points relative to the rate recorded in the corresponding quarter of 2023 (12.11%),” the report explained.
The oil sector contributed 4.60 per cent to Nigeria’s total real GDP in Q4 2024, down from 4.70 per cent in the same period in 2023 and 5.57 per cent in the previous quarter.
The non-oil sector grew by 3.96 per cent in real terms in Q4 2024, higher than the 3.07 per cent in Q4 2023 and 3.37 per cent in Q3 2024.
The growth was primarily driven by financial and insurance institutions, information and communication (telecommunications), agriculture (crop production), transportation and storage (road transport), trade, and manufacturing.
“In real terms, the non-oil sector contributed 95.40% to the nation’s GDP in the fourth quarter of 2024, higher than the share recorded in the fourth quarter of 2023 which was 95.30% and higher than the third quarter of 2024 recorded as 94.43%,” the NBS stated.
This report follows the NBS announcement on February 18th that Nigeria’s inflation rate decreased from 34.8 per cent in December 2024 to 24.48 per cent in January 2025.
The Independent Petroleum Marketers Association, South-West Zone, has vowed that it will shut down operations across the region if the 30 tankers arrested by the Lagos State government are not released.
The Chairman, IPMAN Western Zone, Joseph Akanni, made this known on Monday, during an interview with newsmen in Ibadan, the Oyo State capital.
Akanni declared the association’s support for the Petroleum Tanker Drivers, as well as other stakeholders in the industry over the issue, saying “Injury to one is an injury to all.”
He disclosed that the 30 tankers bearing 45,000 litres of Premium Motor Spirit were towed out of Dangote Refinery at about 3:00am on Saturday, February 22, 2025.
“The vehicles and the drivers were arrested by the Lagos State Traffic Management Authority (LASMA) under the Ministry of Transportation in Lagos and were put at the LASMA yard in Oshodi.
“So, IPMAN is in solidarity with the PTD, National Association of Road Transport Owners (NARTO), and NUPENG is showing solidarity with the other stakeholders to take action against Lagos State governments, especially the Ministry of Transport.
“What the Ministry of Transport has done is against the law. It is dangerous. It is dangerous to keep tankers with petrol in a place because petrol is flammable.
And the information reaching us is that they have started siphoning petrol from the tankers, which implies that we won’t have the same quantity as when it was towed.
“And that we are ready if nothing is done, we are ready to shut down our stations; our petrol stations across Southwest, in solidarity with the tanker drivers,” Akanni said.
The South-West IPMAN chairman revealed that the product in the impounded tankers belongs to members of IPMAN, saying the association is in support of the actions of NUPENG over the incident.
Akanni added that under fire safety regulations, “even if a truck with petrol is arrested, the tanker is supposed to go and offload the petrol first, before anything.”
“So, now they took the tankers with about 45,000 litres of petrol, numbering about 30, which is very dangerous.
“We are giving stern warning that if there is any fire incident, Lagos State government is going to be responsible for the loss of products and the deaths,” Akanni said.
JUST IN: NUPENG, LASG in discussion over towing issues- Official
BREAKING: Nigeria’s GDP grows by 3.84% in Q4 2024, driven by services sector
No extension of UTME registration after March 8 – JAMB
Tech Expert, Zuckerberg trains with UFC champions, Adesanya, Alexander
Organ Trafficking: Ekweremadu bags 10 years in UK prison
SAINT OBI: Between his marriage and his death
-
News1 day agoAt Heirs Energies Leadership Forum, Oil and Gas Leaders Unite to Drive Nigeria’s Oil Production Growth
-
International3 days agoZuriel Oduwole, 22, Makes History as Youngest Nobel Prize Nominee
-
Business2 days agoPresident Pledges Support for Fintech Companies As Flutterwave Seeks Listing on NGX
-
News2 days agoHere’s When To Watch Lunar Crescent Across Nigeria on Friday, February 28, according to NASRDA
-
Business3 days agoFG Mandates IRWG to Revives over 700 Moribund Industries
-
Business1 day agoNACCIMA Tasks FG “Don’t Stripe FTZs of Tax Exemptions “
-
Health1 day agoJUST IN: NCDC reports 80 deaths from lassa fever as fatality rate rises to 19.4% across 11 states
-
News1 day agoChief Ayo Adebanjo scheduled for Burial on May 3, 2025