News & Publications

By: Emmanuel Adefeso (Esq.)

The Federal Inland Revenue Service (FIRS) has issued a public notice titled “NOTICE TO ALL APPROVED ENTERPRISES OPERATING IN FREE TRADE ZONES, EXPORT PROCESSING ZONES AND OIL & GAS FREE ZONES TO FILE INCOME TAX RETURNS”.

The Notice states as follows: “The Finance Act, 2020 which came into effect on 1st January, 2021 amended Section 18(1) of the Nigeria Export Processing Zones Authority (NEPZA) and Oil and Gas Free Zone Authority (OGFZA) Acts respectively. Consequently, notice is hereby given to all enterprises registered and operating in the Nigeria Export Processing and Oil & Gas Free Zones (the Zones), tax practitioners and the general public that: (1) The NEPZA Act and OGFZA Act (as amended) mandates all enterprises registered and operating in the zones to file income tax returns in accordance with the provisions of the Companies Income Tax Act (CITA). (2) As such, all enterprises registered and operating in the zones are required:

(a.) to file income tax returns for 2021 and (b.) to compute income tax and pay the tax due (if any). The returns should be in the manner and time specified by CITA.” For ease of compliance, the notice listed FIRS offices where all approved enterprises are required to file their income tax returns.

No doubt, the public notice issued by the FIRS is an administrative instrument to give meaning to the new tax obligation and procedure which Free Trade Zone (FTZ) Enterprises are required to comply with. Although, the Finance Act, 2020 did not alter the incentives and exemption status of enterprises operating in the FTZs, however, the Finance Act, 2020 introduced a new procedural development, to wit, FTZ enterprises are now required and obligated to file tax returns and provisional accounts. Following this public notice, approved enterprises are to comply with the provisions of Section 55 of the CITA regarding the filing of returns. The returns must be in the prescribed form and contain the appropriate information.

Defaulting companies shall be liable to penalties for non-compliance as specified in the CITA and the FIRS Act. Thus, it is pursuant to the amendment introduced by the Finance Act, 2020 that the Federal Inland Revenue Service (FIRS) issued the public notice directing all approved enterprises within the Free Trade Zones to file income tax returns for 2021. This notice by the FIRS was made pursuant to Sections 58 & 59 of the Finance Act, 2020 and it represents the new procedural obligations for companies in the Free Trade Zones in Nigeria.

Disclaimer: This news update is intended only to provide general information and does not by itself constitute or serve as legal advice. For further information, we are available to provide detailed legal advice.