Nigeria’s prized free trade zones just lost their super-power, and investors are already shopping for a new home.
The Big Picture
A sweeping overhaul of Nigeria’s tax code is set to strip free trade and special economic zones of decades-old tax holidays. The move, insiders warn, could send jobs and capital sprinting across the border.
The Details
The alarm bell rang on Monday when Toyin Elegbede, executive secretary of the Nigeria Economic Zones Association (NEZA), told BusinessDay the reforms “risk eroding investor confidence, jeopardizing over one hundred thousand jobs, and triggering capital flight.”
Under the new Nigeria Tax Act, 2025, free-zone companies, even those that export 100% of their output, will face a minimum tax once the law takes effect next January. A four-year moratorium runs until 2028, according to Presidential Tax Reform Committee chair Taiwo Oyedele, but Elegbede insists the damage to perception is already done.
NEZA argues the provisions clash with the original Free Zone enabling Acts, calling the change “an unparalleled and aggressive encroachment” on the zones’ autonomy. Current and would-be investors are reportedly benchmarking Nigeria against rival hubs with clearer incentives.
Why It Matters / What They’re Saying
The reaction was swift: manufacturers worry costs will jump, while policymakers say the overhaul will widen the tax net without raising rates for ordinary Nigerians. Supporters inside the Tinubu administration frame it as part of a broader push to trim multiple taxes and boost compliance, themes echoed throughout the reform package.
Around the Tax World
• Digital stamp of approval: The Federal Inland Revenue Service (FIRS) has accredited Namiri Technology’s DigiTax platform as an official access point for e-invoicing, a step meant to smooth VAT collection and real-time reporting (TechAfrica News).
• Cracking down on cross-border cheats: FIRS chair Zacch Adedeji urged global leaders at Cambridge to unite against tax crimes that “distort fair competition,” The Nation reports.
• Manufacturers’ mixed reviews: The Manufacturers Association of Nigeria backs the reforms for shrinking multiple levies, even as high FX and a 2.5-point VAT bump sting margins (TV360 Nigeria).
• Exchange-rate sigh of relief: MAN members also credit a steadier naira and easier dollar access for easing import headaches this quarter (WorldStage).
• Private sector nerves: NECA warns overlapping agency fees could blunt the benefits of both the tax rewrite and the upcoming e-invoicing mandate, according to Daily Trust.
• Policy under the microscope: A wider look at President Tinubu’s economic playbook, subsidy removal, FX unification, and tax reform, finds pundits split on whether the pain will yield long-term gain (The Guardian).
By the Numbers
Prime Number: 100,000 jobs,NEZA’s estimate of positions at risk if investors bolt from Nigeria’s free zones (BusinessDay).
Looking Ahead
All eyes are on the calendar: the free-zone tax clock starts ticking in January, while FIRS aims to onboard the remaining 4,000 large taxpayers to e-invoicing before the 1 November 2025 deadline. Brace for a busy Q4 rule-writing season.