June 10 2022

Tax Authority to Commence Tax Compliance Inspections in Free Zones

Source: IBFD Tax Research Platform News

The Federal Inland Revenue Service (FIRS) has signed a Memorandum of Understanding (MoU) with the Nigerian Export Processing Zones Authority (NEPZA) for the effective administration of taxes in free zones in Nigeria.

In line with the terms of the MoU, the FIRS will require exempt businesses operating within the free zones to file returns. These businesses are statutorily required to file returns, for government documentation and planning purposes.

It is also expected that business entities within the free zones will act as VAT collecting agents for the FIRS when any taxable supplies are made between the business and other companies not operating within the free zones.

Further, the FIRS would be granted access to the free zones to conduct tax compliance inspections at periodic intervals.

The MoU signed on 8 May 2022, was also to bridge cooperation gaps between the government agencies and ensure the efficient operation of activities in the zones.