Customs accuse companies in FTZ of violating tax laws

Comptroller-General, NCS, Bashir Adeniyi

The Comptroller General of the Nigeria Customs Service, Adewale Adeniyi, has accused companies operating in the nation’s Free Trade Zones of violating the law regulating their operations.

Adeniyi stated this on Friday in Abuja at the closing day of the House of Representatives public hearing on the tax reform bills organised by the Committee on Finance

He claimed that the companies are going into Customs areas where extant tax laws are operational to conduct their businesses.

His statement was in response to an allegation by the Nigerian Chambers of Commerce, Industries, Mines and Agriculture that, tax and levies are allegedly imposed on companies operating in Free Trade Zones by the Nigerian Customs.

He said, “The sticky issue over the years has been the compliance of free trade zone operators with the provisions of the law. The law allows them to import every manufacturing input they need, 100 per cent sometimes, including things that are prohibited into the customs territory.

“In fact, a lot of those incentives were given to them to manufacture. However, the initial incentives were for them to export everything that they imported inside this free zone. But from time to time, I think they started to develop loan proofs for the local markets. And they felt that they couldn’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 the federal market the regulations of change allow them to export 25 per cent of volume and factory into the local market, into the local customs territory and subject to extant laws 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.”

He continued, “There have been reported violations of these provisions. We have seen some of them that were expected to export 100 per cent of the things that they produce in the free zone in 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 armoured cars and luxury goods.

Also speaking, the immediate past President of the Nigerian Bar Association, Yakubu Maikyau, has urged the National Assembly to work on the tax reform bills in a manner that will protect the interest of Nigerians.

He said, “I have put down in my mind that these proposed bills that have been submitted to the National Assembly by the President seek to advance the course of prosperity to the people of this country.

“Nigerians expect that arising from these bills will be a regime that will recognise their sacrifices and also they will have an opportunity to see that the sacrifices count.

“They should be able to see themselves as being a part of the process that led to the development of this economy. 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.

The Association of Bureaux De Change Operators of Nigeria whose presentation was delivered by the Chairman, North Central Zone, Thomas Okoye, expressed reservations over the impacts of some provisions of the Bills on their transactions.

The association argued that Given the directive of the Central Bank of Nigeria on the need for a capital base of Bureau De Changes, further taxes will strangle their business, thus worsening the unemployment situation in the country.

Addressing journalists after the close of the last session of the public hearing, Chairman of the Committee, James Faleke, (APC, Lagos) said that the public hearing as part of the legislative process provides a platform where stakeholders give their inputs which will be incorporated to come up with a balanced legislation that incorporated important parts of opinions.