Nigeria Customs Chief Accuses Free Trade Zone Companies of Legal Violations

The Comptroller General of the Nigeria Customs Service, Adewale Adeniyi, has raised concerns over companies operating in the nation’s Free Trade Zones (FTZs), accusing them of breaching the laws governing their operations.

Adeniyi made these remarks on Friday in Abuja during the closing session of a public hearing on tax reform bills organized by the House of Representatives Committee on Finance. He alleged that some companies are venturing into Customs-controlled areas, where standard tax laws apply, to conduct their business activities.

His statement came in response to claims by the Nigerian Chambers of Commerce, Industries, Mines, and Agriculture (NACCIMA) that the Nigeria Customs Service imposes taxes and levies on companies operating within the Free Trade Zones.

Adeniyi explained, “The persistent issue over the years has been the compliance of Free Trade Zone operators with legal provisions. The law permits them to import all necessary manufacturing inputs, sometimes even 100%, including items otherwise prohibited in the customs territory. These incentives were initially granted to encourage manufacturing, with the expectation that all products would be exported. However, over time, these companies began targeting the local market, deviating from their original mandate.”

He added, “Regulations now allow them to export up to 25% of their production volume into the local customs territory, subject to existing laws governing imported goods. However, I cannot assert that full compliance has been achieved. There have been reported violations, including cases where companies expected to export 100% of their products have instead diverted them to the local market. We have even seen instances of Free Trade Zone enterprises importing goods like locally made armored vehicles and luxury items into Nigeria.”

Calls for Tax Reforms to Protect Nigerians’ Interests

Also speaking at the event, Yakubu Maikyau, immediate past President of the Nigerian Bar Association (NBA), urged the National Assembly to ensure that the tax reform bills prioritize the interests of Nigerians.

Maikyau stated, “I believe these proposed bills, submitted to the National Assembly by the President, aim to advance the prosperity of the Nigerian people. Nigerians expect that these reforms will recognize their sacrifices and provide tangible benefits. They want to see themselves as active participants in the economic development process. This is the expectation, and I am confident that Nigerians appreciate the importance of this legislative effort.”

Concerns from Bureau De Change Operators

The Association of Bureau De Change Operators of Nigeria, represented by Thomas Okoye, Chairman of the North Central Zone, expressed reservations about certain provisions in the bills. The association argued that additional taxes, coupled with the Central Bank of Nigeria’s directive on increased capital requirements, could severely impact their operations, potentially worsening unemployment in the country.

Commitment to Balanced Legislation

Addressing journalists after the hearing, James Faleke, Chairman of the House Committee on Finance, emphasized that the public hearing was a crucial part of the legislative process. He noted that stakeholders’ inputs would be carefully considered to create balanced and inclusive legislation.

Faleke stated, “This public hearing provides a platform for stakeholders to contribute their perspectives. Our goal is to incorporate these insights to develop a comprehensive and fair legal framework that addresses the needs of all parties involved.”