In this post we will be looking at Zero duty, no VAT, WHT or corporate taxes in oil and gas export free zones and the Advantages.
INTRODUCTION
Some concerned Free Trade Zones operators have raised the alarm over attempts by management of the Oil & Gas Export Free Trade Zone Authority (OGEFZA) to interfere with licensing and management of export free zones. In an open letter, the stakeholders called on the federal government to halt alleged attempts by the OGEFZA management to alter provisions of its own Act and that of the Nigeria Export Procession Zones Authority (NEPZA).
“The Federal Government must as a matter of urgency investigate this matter and also look into the activities of OGEFZA towards protecting the investments of concerned Free Zone Stakeholders in NEPZA licensed Free Zones who had before now enjoyed the full support and cooperation of the Federal Government.
Read: Foreigner’s Guide to Start Business in Nigeria
Zero duty, no VAT, WHT or corporate taxes in oil and gas export free zones
Oil and Gas Free Zones (OGFZs) are strategically located in the heart of the Niger delta, by the ports of Onne, Warri and Lagos. These sites offer strategical platforms for the provision of logistics solutions, to the industry and to the wider territory as a whole. The Nigerian Government established a Onne Oil and Gas Free Zone in 1996, to set an Oil Service Center (OSC) for onshore and offshore operations while providing the West African and greater sub-Saharan Oil & Gas industry with easy access and duty-free distribution facilities. Following the Onne OGFZ’s success, the Government decided to declare the Port of Warri an Oil & Gas Free Zone in May 2011.
Zero duty: Cargos contained within the Free Zone and exported to another territory are exempted from duty.
No VAT, no WHT, no Corporate Taxes: No quota restriction for expatriate employees in the Free Zones.
Duty Free Stock: Spare parts, equipment, etc. as long as they remain within the Free Zones.
No Expatriate Quota: No quota restriction for expatriate employees in the Free Zones.
Read: How to Open Bank Account as A Foreigner in Nigeria
ADVANTAGES OIL AND GAS EXPORT FREE ZONES
Oil & Gas Free Zones offer undoubted advantages and incentives to foreign companies to invest in Nigeria. Some examples include:
- Business Incentives
- 100% repatriation of capital investment, remittance of profits and dividends allowed, no import or export licenses required;
- 100% of FZ goods can be sold in Nigeria;
- 100 % foreign ownership of business allowed, duty-free stock, equipment, spare parts, pipes, no double-handling in and out of Nigeria
- Customs Incentives
- No customs duty payable for goods stored within the Free Zone or goods consumed within the Free Zone (including equipment and machinery);
- No customs duty payable for export of Free Zone goods to other countries;
- Free Zone goods may be transferred under customs’ escort from any port or airport of entry in Nigeria to Oil and Gas Free Zones.
- Tax Incentives
- No value added tax; No withholding tax;
- No corporate tax; No capital gains tax.
- Immigration Incentives
- Free movement in and out of the Zone;
- Immigration fast-track procedure