Wednesday, September 8, 2021


One good thing about Law is that Law is dynamic and it grows.

Law essentially ought to be derived from the culture and practice of the people to guide conducts.

Legal experts and professionals in all fields  must not sit on the fence whenever a new law is going through readings  either in the National Assembly or at the State Assembly.

There are Laws in Nigeria that cannot stand the test of time in court of competent jurisdiction with honest  judges. There are too many laws that either run contrary to the constitution or to previous enactment in accordance with first in time Principles.

There are too many Laws in Nigeria that are also aimed at oppressing the people and making life difficult  and of course negatively affecting foreign direct investments. All sorts of administrative policies that are of negative consequences have also made their ways into legislative provisions.

It is important to note that Equity does not aid the indolence.

Thank God for concerned citizens who challenged Road Safety New Plate Number issues, Restriction of movement in Lagos on sanitation days and now we are hearing that ear phone which is to enable you speak while driving without touching your phone is now a crime attracting 6 months jail terms..What is wrong with people here in Nigeria.? We are the one causing problems for fellow Nigerians.

Therefore , unless Nigerians make efforts to test the legality of illegal laws in court, judges will not make any pronouncement as they are not meant to rule matter that are not brought before them.

Example is the verdict  of the  Federal High Court sitting in Rivers State over Value Added Tax collection right which many of us have researched into over the years and have written and spoken extensively about but not many people care to listen like WIKE did.

Today one illegal Law is doing more harm to the country than good and that is a section in the Finance Act of 2020 that contradicts Section 8 and Section 18 of NEPZA Act which protect entities in free trade Zones as they are entities regarded as operating  outside custom's territories.

In accordance with Section  8 and section 18 of NEPZA Act, 

Free Trade Zone entities enjoy certain  benefits which is obviously the attraction to register under NEPZA and operate in a free Trade Zone .Some of the benefits are also  highlighted below among other issues: 

1."Any legislative provision related to taxes, levies, duties and any foreign exchange regulations which are applicable in the country will not apply to the companies   registered under NEPZA ( Nigeria Export Processing Zone Authority).

2. What the law maker that worked on 2020 Finance Act do not known is that such a singular provision that exempt Free Trade Zone entities from legislative provision on tax matters is enough to invalidate the new draconian laws aimed at amending Section 18 of NEPZA which is suspected to be the work of Federal Inland Revenue Services to enlarge the scope of monitoring entities that should be left alone except on special request by NEPZA.

3 The Finance Act of 2020 now makes it a must for Free Trade Zone entities to file Tax Returns to Federal Inland Revenue Services and a follow up circular was issued by FIRS..

4.The filing ordinarily should be limited to the one they usually file with  NEPZA because such entities are not registered by Corporate Affairs Commission which makes them entirely different .

5.As if that is not enough, some FIRS officers are already sending letters to Free Trade Zone entities to scrutinise their books and waste time going back and forth asking questions that ought not to be asked at all.If an entity is exempted from Tax and he does not earn outside free Zone, what do you want to do with their expenses. You can seeks help to go after some other companies but that in a friendly manner through writing of letters to request for information as an agency of government .

One may have to assume that such officers  are not well grounded in Tax Laws and perhaps do not understand the  spirit behind the letters of the law and the intention of those who promulgated NEPZA Act before the 2020 Finance Act with a clause that 'no Legislative Provisions on Tax will be applicable to such entities" .

6.The Federal Government and the likes of Femi Falana and Alhaji Aliko Dangote and all well meaning Nigerians who understands the positive  impact of Free  Trade Zone entities should rise up and seek immediate amendment of such Laws so as to ensure that we do  not  subject Free Trade Zone entities to tax troubles.

7.FIRS should on the other hand carry out their intelligence study  and act in a professional manner by conducting secret investigation and  ensure that only entities that violate operations within the zones are subjected to tax troubles after establishing that they earn outside the zones.

8.Such companies should be written with specific letters stating information such as: 

"we observed you generated income from the following companies outside the zone on XYZ date and as such liable to tax of ABC .

Kindly pay accordingly within 14 days and provide details of the nature of the following inflows and associated cost with evidence."However, if these inflows are not income, kindly bring forward to us verifiable evidence to substantiate your claim so that we can discharge this liability" 

9. Threatening, penalising and disturbing Free Trade Zone entities generally will push many companies away from Nigeria because no one will be able to trust our Tax Policies and reliefs we use to attract investors to our  country.

10. In conclusion, interested parties affected by this unwarranted anticipated  disturbance should immediately file a suit in court to seek interpretation and superiority of existing NEPZA law prior to Finance Act of 2020 especially to the extent that it forbids application of any legislative provisions on tax to Free Trade Zone entities.

11.The application of Section 55(1) of CITA which imposes all applicable penalties has nullified the main essence of free trade zones because in the months and years ahead and in view of available information to practitioners; officers of FIRS who do not know the reason behind free trade zone laws will begin to even ask questions that are not applicable to entities exempted from Tax.

 12.Let me end with a proverb in Yoruba land that says:

 "They told him to eat, he said it is full of bones, they requested that he should return it,  he said there is small meat therein"

If you want to grant exemption to attract foreign direct investments ..grant it not give exemption with one hand and take it back with another hand.

13. If Nigeria must move forward, we must rise to stop any illegal Law in the Land  because not all laws are moral and not all laws are lawful.We can see that in the VAT Act of 1993 which contradict True Federalism and for 28 years States have remained in bondage.

Dr .Gbenga Adeoye.
8th September, 2021

The author, Dr.Gbenga Adeoye  holds a Bachelor's Degree in Law.( LLB)

He holds an MSc. in Banking & Finance.
He holds a PhD in Management Accounting.

He also holds a Diploma in Criminology and Security studies.

He is a Fellow of The Institute of Chartered Accountants of Nigeria ( FCA) , a Fellow of The Chartered Institute of Taxation of Nigeria ( FCTI) &  an Arbitrator of UK and Nigeria.

He is an advocate of Peaceful Co Existence,  Tax Justice, Good Governance and Socio Economic Development of Africa in general and Nigeria in particular.

He believes that without Peace, there will be no progress no matter how small the entity is.He is of the opinion that National, State, Community and Family Transformation and Development is hinged on the  Quality of people in charge of our  affairs.

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