Oil, gas free zones authority seeks 10-year tax exemption

The Managing Director and Chief Executive Officer of OGFZA, Bamanga Jada

Kindly share this story:

The Oil and Gas Free Zones Authority has backed calls for a 10-year tax exemption for operators in Nigeria’s oil and gas free zones, warning that an abrupt application of the new tax law could disrupt long-term investments and undermine investor confidence.

The Managing Director and Chief Executive Officer of OGFZA, Bamanga Jada, made the call during a town hall meeting with the Federal Inland Revenue Service and operators licensed by the authority.

The appeal is coming barely one month before the implementation of Nigeria’s new tax act.

A statement by the authority on Sunday said the meeting was held in Onne, Rivers State.

Recall that the Nigeria Export Processing Zones Authority recently urged the Federal Government to grant a 10-year tax relief to all operators within the Special Economic Zones.

Jada said the proposed exemption period would provide operators with what he described as “adaptation space” to align with the evolving tax framework, while safeguarding investments structured around long-term fiscal incentives.

“OGFZA supports the call for a 10-year extension of existing tax incentives, alongside a phased implementation of the new tax regime to mitigate potential disruptions.

“Many of our licensees, including major foreign investors, plan their businesses over 10, 15 or even 25 years, based largely on the incentives in place at the time of investment, he said.

According to him, granting a transitional window would reinforce policy consistency under President Bola Tinubu’s Renewed Hope Agenda, which he said remained critical to sustaining foreign direct investment and industrial growth.

The OGFZA boss disclosed that Nigeria’s free zones had attracted more than $24bn in investments, stressing that energy-focused free zones had played a transformative role in other economies.

He cited global examples such as the Jebel Ali Free Zone in Dubai and the Sohar Free Zone in Oman, noting that strong incentives in those jurisdictions had drawn billions of dollars in investments, created large-scale employment and positioned the host countries as global industrial hubs.

“Similarly, OGFZA-regulated free zones in Nigeria have secured over $24bn in investments, host more than 200 enterprises and have generated hundreds of thousands of direct and indirect jobs.

“This demonstrates the importance of competitive incentives and effective regulation in driving industrialisation”, Jada said.

He commended Tinubu for his commitment to tax reforms and economic transformation, while also praising the Minister of Industry, Trade and Investment, Dr Jumoke Oduwole, for her support and advocacy for the free zones sector.

Jada further revealed that exports from Nigeria’s oil and gas free zones had surged under the current administration, reaching 496,537,804 metric tonnes and generating significant foreign exchange inflows.

“Our operators now export to markets such as Brazil, the United States, France, India, the United Kingdom and the Republic of Korea, in line with the Renewed Hope Agenda,” he said.

He reaffirmed OGFZA’s commitment to continued collaboration with FIRS, in line with an existing memorandum of understanding, to ensure that tax reforms are implemented in a fair, transparent and investor-friendly manner.

In his remarks, the Executive Chairman of FIRS, Dr Zacch Adedeji, described the 2025 tax reforms as a critical step towards modernising Nigeria’s fiscal system and strengthening compliance.

Represented by his Special Adviser on Tax Incentives, Cletus Adie, Adedeji said the introduction of a tax clearance certificate as a mandatory requirement for the renewal of operating licences had become necessary.

“For export processing and free trade zones, the emphasis is not on taxing income or profits, but on transparency, accountability and proper reporting,” he said.

Adedeji added that improved compliance would enable free trade zones to contribute more effectively to national development, which he described as the core objective of the Special Economic Zones framework.

He also pointed to what he termed persistent non-compliance by some enterprises, noting that this had made it necessary to adopt a structured administrative approach, as provided for under Section 72(4)(f) of the Nigerian Tax Administration Act.

Stakeholders at the meeting, however, unanimously appealed for the exemption of operators in special economic and free zones from the immediate application of the new tax law, arguing that a transition period was essential for stability and sustained investment in the sector.

Nigeria’s new tax act, expected to take effect in early 2026, will streamline incentives, tighten tax compliance and phase out some existing waivers.

However, free-zone operators argue that abrupt changes could erode the cost advantages that attracted investors in the first place, especially manufacturers, logistics hubs, exporters, and technology parks operating under long-term business plans.

Before now, free-zone operators typically enjoyed tax holidays, duty exemptions, repatriation rights, and simplified regulatory processes, key features that positioned SEZs as safe havens for investors seeking stability.

The removal or abrupt alteration of these incentives risks triggering capital flight at a time the country is trying to increase industrial output, grow non-oil exports, and court global supply chains.

A business, investment, infrastructure and property correspondent currently with The PUNCH, Aina is a media professional with over three years experience

Kindly share this story:

All rights reserved. This material, and other digital content on this website, may not be reproduced, published, broadcast, rewritten or redistributed in whole or in part without prior express written permission from PUNCH.

Contact: [email protected]

UPDATE NEWS: Nigerians can now invest ₦2.5million on premium domains and profit about ₦17-₦25Million. All earnings paid in US Dollars. Rather than wonder, 👉 click here to find out how it work (Be sure to ask for evidence of clients that have benefitted from this)

Stay informed and ahead of the curve! Follow The Punch Newspaper on WhatsApp for real-time updates, breaking news, and exclusive content. Don't miss a headline – join now!

Stay in the know—fast. Get instant alerts, breaking headlines, and exclusive stories with the Punch News App. Download now and never miss a beat.