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Tag: Free Trade Zone

  • Customs boss accuses companies operating in Free Trade Zone of violating tax laws

    Customs boss accuses companies operating in Free Trade Zone of violating tax laws

    The Comptroller General of the Nigeria Customs Service (NCS), Bashir Adewale Adeniyi, has accused companies operating within Nigeria’s Free Trade Zones of violating the laws that govern these zones, causing economic harm to the country.

    Speaking on the final day of the Tax Reforms Public Hearing organized by the House of Representatives Committee on Finance, Adeniyi alleged that some companies were conducting business in Customs-controlled areas without complying with existing tax regulations.

    Although he initially presented the NCS’s position on tax bills on the first day, Adeniyi was recalled by the committee to address claims by NACCIMA that the Customs Service was imposing taxes and levies on companies within the Free Trade Zones.

    Adeniyi said, “the sticky issue over the years has been the compliance of free trade zones operators with the provisions of the law. Whereas, the law allows them to import every manufacturing inputs they need, 100%. Sometimes, including things that are prohibited into the customs territory. 

    “In fact, a lot of those incentives were given to them for them to manufacture. But the initial incentives were for them to export everything that they import inside this free zone. 

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    “But from time to time, I think they started to develop loan proofs for the local markets. And they felt that they can’t trade anything from the local markets. 

    “So I think there was a need to produce all the services we can provide to the local markets. from the local market to federal market and the regulations of change allowing them to export 25% of volume and factory into the local market, into the local customs territory and subject to extant law affecting goods that are imported into Nigeria. 

    “I cannot stand here, Mr. Chairman, and tell you that this has been observed absolutely at full compliance. There have been reported violations of these provisions. 

    “We have seen some of them that were expected to export 100% some of the things that they produce in the free zone into Nigeria. We have even seen cases of some free zone enterprises that want to export to Nigeria. We have seen the import of locally made armored cars, luxury goods. 

    “Some of them, they are perhaps thinking that this would be for the operations of the free zones. Because we cannot justify this under the labeling act, we have resisted such attempts in the past”.

    Former President, Nigerian Bar Association, Yakubu Maikyau asked the National Assembly to ensure that the proposed Tax Reform Bills serve the interests of Nigerians and make their lives better.

    Maikyau who said he was speaking in his private capacity and not on behalf of the NBA said, “I have put down in my mind that these proposed bills, these bills that have been submitted to the National Assembly by the President is one that seeks to advance the course of Provide prosperity to the people of this country. Provide empowerment to the people of this country. 

    “Nigerians expect that arising from this bill will be a regime that will recognize their sacrifices and also they will have an opportunity to see that the sacrifices that they have made in being a part of this process where they are asked to recognize their sacrifices and also they are asked to make contributions in to the development of this economy. 

    “They will not only be involved in their activities. That is the expectation of Nigerians. And I know that Nigerians appreciate the fact that they are in this place because this is the only place where this kind of business can be undertaken.

    “This is my interest because this is a process that is correctable on this continent. And so we have a responsibility beyond the risks that we take from some of you once in the while in the cycle that comes around. We have a responsibility to provide direction to the people of this country and to also advance the course of this country”.

    In his closing remark, the Chairman, Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele commended the House for conducting the public hearing in order to allow Nigerians to contribute in having a law that will transform the country’s tax laws and improve economic activities.

    Also speaking, the Chairman, Federal Inland Revenue Service (FIRS), Zach Adedeji said, the engagement of Nigerians on the Tax Reform Bill through the Public hearing has given Nigerians the opportunity to understand the Bills. 

    Making their submission earlier, the Congress of University Academics (CONUA) represented by Prof. Isa Abdulraheem opposed the proposed increase in Value Added Tax (VAT) as stated in Chapter 6, Part I, Section 146 of the bill. It recommended maintaining the current VAT rate of 7.5% and broadening the tax base to include more taxable items.

    On their part, the Nigerian Investment Promotion Council (NIPC) which was presented by Mrs Uchenna Okonkwo stated that, contrary to the provisions of Section 167 (3), the “NIPC as the processing Agency of the incentives and in the exercise of its statutory mandate of recommending priority sectors/products for incentive should be empowered under this Act to make recommendations to the President for amendments of the list”.

    The Association of Bureaux De Change Operators of Nigeria (ABCON) expressed reservations over the impacts of some provisions of the Bills on their transactions.

    Represented by Chairman, North Central Zone, Thomas Okoye, the group said coupled with the directive of the Central Bank of Nigeria (CBN) on the astronomical increase of the Capital Base of Bureau De Changes (BDCs), further taxes will strangle their business and push many out which will cause unemployment in the country.

    Chairman of the committee, James Abiodun Faleke said that, Public hearing provided a platform where stakeholders give their inputs which will be incorporated to come up with a balanced legislation that incorporated important shades of opinions.

    He commended the stakeholders who made observations and suggestions as a group or individuals, agencies of government and private entities as well as government agencies.

    Faleke said, “We’ve done that now, the public have responded to us, we will now look at every detail to propose a bill, a bill that will now be passed into law, considered by the House, if the House agrees with all our suggestions. 

    “When we finish and we lay a report and it is discussed on the floor or debated and passed, we will compare with what the Senate passed, any areas of differences, we will harmonize”.

  • Stakeholders reject amendment of Free Trade Zone law

    Over 200 maritime stakeholders, including the Seaport Terminal Operators Association of Nigeria (STOAN) and other leading industry groups, have petitioned President Muhammadu Buhari over planned amendment of the free trade zone law.

    There was jubilation in a section of the maritime industry on the recent action of the Managing Director of the Nigerian Ports Authority (NPA), Hadiza Bala Usman, who conveyed President Buhari’s approval guaranteeing the right of importers to choose terminals or ports to discharge their cargoes.

    Stakeholders were excited that the presidential order   ended the monopoly of an international servicing firm at the ports.

    A leader of one of the groups, who spoke in confidence, said the sector had reportedly lost $10 billion in investments and $3 billion in direct payments to a company that allegedly held the industry hostage.

    The source said the presidential directive, which designated the Onne Oil and Gas Free Zone Terminal in Rivers State as a multi-purpose cargo terminal, was a welcome development.

    It was learnt that previous non-designation did not legally obstruct or compromise the operations of the free zone for cargoes, including oil and gas.

    According to him, a bill for an Act to amend the Oil and Gas Export Free Zones and sub-zones in Nigeria, which has passed second reading in the House of Representatives, was bad for the sector.

    The source said it was towing the line of a businessman whom he accused of bankrolling the amendment.

    He added: “If the amendment scales through, it would reverse penultimate week’s order, which guarantees the right of importers to choose terminals or ports for the discharge of their cargoes. It would also whittle down the powers of the Nigerian Export Processing Zones Agency (NEPZA), which has the mandate to designate any free investment zone, whether oil and gas or not.

     

     

  • ‘Investments secure in Ogun Free Trade Zone’

    THE management team of the Ogun Free Trade Zone, Igbesa, has assured investors and those planning to invest of a secured and prosperous environment.

    According to the team, the management change will boost investments in the area.

    It added: “ Not only are the current  investors not leaving the  zone, the new management under the New South Group is in the process of attracting more investments  to the zone.”

    Chairman of China Africa Investment Ltd Mr Chen Yuejin  said the claim by former  managers that investors were  threatening to leave the zone  were “untrue and unfortunate”.

    He spoke at a meeting with some of the investors in the zone –  Mr. Gao Jian Zhong, Mr. Abbey  Onas and Mr. Jiang Qingqing – to explain the push for a better Free Trade Zone under his watch.

    Yuejin promised that the New South  Group will bring in more investors.

     “We know that the  disparaging remarks by former managers are  primarily designed to  achieve the unsavoury measure  of discouraging potential  investors from investing in  the zone by creating a siege mentality within the zone and  to cause an investment flight away from the zone,” Yuejin said.

    He accused the former managers of depleting the assets and infrastructure they met  on ground and failing to account for  revenues during the  period they managed the zone.

      “Since the termination of  Zhongfu’s management of the zone, the existing investors  registered several complaints  on the inability of Zhongfu  to address the needs of the  investors within the zone.

    “However, since most of the  investors within the zone are  aware of the managerial  pedigree of the New South  Group, they have expressed  their support for the new  management and readiness to  work with the new management.

     “It is also worthy to note  that the Government of  Guangdong Province in Peoples  Republic of China is also looking into the activities of Zhongfu within the zone  and in its interface with  Ogun State Government with a  view to prosecute in  accordance with the  applicable Chinese law.

    “Guangdong  Province still owns 49 per cent  equity in China Africa. Both  Guangdong New South Group and  the Guangdong Province have  the capacity to further develop the zone to match  the standard of the most notable  Free Trade Zones in the World.”

    Secretary to Ogun State  Government Taiwo  Adeoluwa said:  “We want the zone to grow. We  cannot disregard the  diplomatic letter the embassy sent to us in March. We  are a people friendly state and we want investors.”

  • Awaiting good news

    I got  an exciting  news from Calabar, the Cross River State capital some days back. It was delivered in the form of a story by our man in the tourism city. The news: the summit hills projects are taking shape and by April next year, all will be ready for use.

    I am sure you are wondering what these projects are. I will get to that shortly. Just permit me to go to the beginning of the matter. Tinapa was the beginning.

    Tinapa, a leisure and shopping hub, was meant to be a good news. Donald Duke, the handsome ex-governor of Cross River State, was the bearer of the news. Excitement was in the air. The global media, especially the CNN, felt the vibe. It was like Nigeria’s own Dubai was in the making, even though on a small scale.

    All the trappings were there: an artificial lake; water parks; a shopping mall; a beautiful four-star hotel; and above all, an atmosphere of peace and tranquility. The promise was just too much to ignore.

    I understand that the prices of landed property in the Tinapa axis also felt the vibe. It shot up in expectation of the good times. For a state that literally parties all of December through its Calabar carnival, little fear was expressed in terms of traffic to the resort and leisure centre.

    But the wait soon lasted than expected. Not that the project was not completed on time. It was just that the hype seemed to have overlooked a critical element of such a venture. Planned as a Free Trade zone (FTZ), the project was completed without this all-important status backed by law. It was not a law that the Cross River State House of Assembly could pass. That would have been easier to get. The Federal Government is the only authority that can gazette an entity as FTZ. After so much time, this hurdle was crossed. But not in Duke’s time. His friend and successor, Liyel Imoke, who was minister and at a point a senator while he was governor, accomplished this task. By the time this was done, a lot of people who bought into the dream had already given up.

    More hassles were on the way. For a long time,  the businessmen operating there were having issues with the customs which, for some unexplained reasons, did not threat them as operating in a FTZ. This meant they had to pay duties, thus rubbishing the duty-free goods that were supposed to be sold in the stores. I understand that there were also the issue of big vessels not being able to come into the Calabar port over the issue of dredging, which forced the businessmen to bring their goods through Onne Port in Rivers State.

    It did not take time before other funny issues came up. For instance local government areas in the state said they invested in the project and decisions on it should involve them. This was at a time when the project’s indebtedness to banks had grossed many billions. The debt buyer, the Assets Management Company of Nigeria (AMCON), has since come in. It is in the process of appointing a manager for this place.

    While that is being awaited, the shops are empty. A colleague, who was there some months back, said the place is like a ghost town. People he spoke with made him realize that the Federal Government can also help by ensuring that the status of the place as a FTZ should be respected by customs. They also told him that the Federal Government must fix its roads in Calabar to help Tinapa. They did not forget to talk about the need to complete the dredging of the Calabar port.

    But thanks to the Lakeside Hotel and Mo Abudu’s EbonyLife TV, which is using the Studio Nollywood, Tinapa would just have been money rotting before our very eyes.

    And that brings me to the summit hills projects. The projects are expected to also breathe life into Tinapa. There is a link between the Calabar International Convention Centre (CICC), an integral part of the Summit Hills projects, through a monorail.  This way, the distance between Tinapa and Calabar’s heart will be shortened.

    Imoke’s idea for the summit hills projects was to build a new town around Tinapa. The town has superb road network. Even when the projects had not been totally finished when I last visited, the promises they held could easily be seen. It has an international specialist hospital, a partnership between the government and a foreign entity. This is meant to engender medical tourism. I was told it would have everything Nigerians rush to India and other places for. There are also residential homes on the hills. The golf course promises to be the best in the country.

    With such a life built around Tinapa, the giant may just wake up. It has been in a deep slumber. I am eagerly waiting for the doors to the CICC and other projects on the summit hills to be thrown open in April. Imoke, let’s keep it a date. It sure will be a good way to end a two-term administration, which only a few will knock for failure.

     

    Edo, Edo, Edo!

     

    The lawmakers are yet to find peace. Now, we hear of explosion rocking a property of a former Secretary to the State Government (SSG), Pastor Osagie Ize-Iyamu. Since the explosion, brickbats have been flying. Ize-Iyamu pointed finger of guilt at the Adams Oshiomhole-led government. The government said it was all a ploy by the Peoples Democratic Party (PDP) to cause wahala in the state. You may wonder why Ize-Iyamu  would accuse the government. May be a few background will do.

    Until some months back, Ize-Iyamu was a member of the All Progressives Congress (APC), which is the ruling party in the state. He fell out with the governor and defected to the PDP. Since then, each of them has seen nothing good in the other.

    The explosion coming at a time when Nigerians are yet to get over the invasion of the legislators’ quarters by thugs, which led to the destruction of property, does no good to the state’s image.

    If there are doubts about who are behind this violence in Edo, it is crystal clear that politics has a lot to do with it. But is it really worth it? Why maim, destroy and spill blood in the name of serving the people? Is politics not about serving the people? If it is, then why cause havoc? I just can’t get it.

     

    Akwa Abasi Ibom State

     

    Pardon me if I confused you with the title of this piece. It is about Akwa Ibom State. I just like spelling it out that way to show its true meaning “God’s own state”. The elders are still angry with Governor Godswill Akpabio. Elders here include ex-Governor Victor Attah and former Minister Don Etiebet. Their grouse: Akpabio cannot force a candidate on the Peoples Democratic Party (PDP). The governor has told the youths not to allow themselves to be misled by the elders.

    Aside this drama, there is also the one about some people in Abak 5 trying to stop His Excellency from becoming a senator in 2015. This is coming at a time the governor is garnering endorsement for his ambition.

    So, Akpabio is fighting two battles: to install a successor and to be a senator next year. On the face value, he looks set to defeat his opponents, including men who some months back were his boys.

    The state is sure one place we can’t close our eyes on. Interesting times lie ahead. Watch out.

     

  • Free Trade Zone will ease port congestion

    The Lekki Free Trade Zone (LFTZ) will ease importers’ pains at the ports when it begins operation in 2017, its Director of Finance, Kundan Sainani, has said.

    The LFTZ, he said, would provide lasting solution to port congestion.

    Speaking when the Nigeria Shippers Council (NSC) management visited Tolaram Group of Companies, the promoters of LFTZ, Sainani said there was need for new facilities to grow the economy because of port congestion.

    According to him, containerised cargo demand is on the increase and there are capacity constraints at the ports.

    The firm, he said, would invest $1.5 billion in LFTZ.

    The fund is expected to be provided by Tolaram, the Nigeria Ports Authority (NPA) and the Lagos State Government.

    Sainani said: “By the end of 2017, the port will be operational and together with the Lagos State Government and the Nigeria Ports Authority, we are investing $1.5 billion.”

    He said the LFTZ would build a state-of-the-art facility that would be technologically-driven and also provide effective and efficient port operation.

    The multi-purpose port comprises liquid, container and bulk terminals, with 1,500-metre quay-side and 14 metres draught.

    Sainani said:  “Railway facility is important in this kind of project because that is what happens elsewhere in the world, but you are equally aware that it will take a longer time to be completed.”

    The zone, he said, is connected to Lagos and the hinterland, adding that there is the need to expand existing road network to avoid congestion and gridlock on Apapa ports’ access roads.

    The Executive Secretary, Nigeria Shippers’ Council (NSC), Hassan Bello, called for good roads and rail network in the zone to avoid what stakeholders are facing in Apapa.

    Bello said there was the need for the LFTZ to provide good roads to avoid what is being experienced at the Lagos Ports of Apapa and Tin Can Island, adding that the LFTZ  could address such issues.

  • Imo to build Free Trade Zone soon

    Imo to build Free Trade Zone soon

    Imo State government is to build a prototype of the Calabar Free Trade Zone, to boost commerce and tourism in the state.

    This was disclosed by the state Commissioner for Lands, Housing and Urban Planning, Hon Uche Nwosu, while handing over the cheque for the payment of compensation for the over 2000 acres of land acquired for the project to the host community Ngor-Okpala Local Government Area.

    The commissioner, who assured that serious work will soon begin on the site, gave assurance that when completed, the Free Trade Zone will open up the state to international business community with its attendant benefits.

    According to him, the development partners are already waiting with required funds and other logistics and would soon mobilise to site, adding that, “once the state government has concluded discussions with the development partners, they will mobilise to site and deliver the project on schedule”.

    Enumerating the benefits of the project to the state and especially the host communities, Nwosu charged the consortium that received the payment on behalf of the land owners to ensure that proper claim survey was conducted to ensure that no one was short changed.

    He said: “This government has been diligent in the payment of compensations to communities for acquired lands and we urge you to ensure that the people get what is accrued to them depending on the size of their land that was acquired by government for the project which will also benefit the people immensely. I also plead with you to advise and educate the youth to support the project by allowing the developers unhindered access to the land as proper work commences”.