• Saturday, July 20, 2024
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Proposed Customs Bill will cripple Nigeria’s free trade zones, discourage investment – NEPZA

Nigeria Export Processing Zones Authority (NEPZA) has kicked against the proposed Customs Service reform bill particularly the provisions that seek to give the Nigeria Customs Service (NCS) powers to make regulations in respect of the Zones.

NEPZA said some sections of the bill will cripple, subvert the zones and discourage investment, as it negates the very concept and purpose of free trade zones in the country; and urged the National Assembly not to proceed with the bill.

The authority also held that the development, if not nipped on the board, would result in either multiple regulations that might be contradictory, thereby creating avoidable legal tussles or making registration of enterprises unnecessarily cumbersome and unattractive.

In a submission to the ongoing public hearing on the Customs reform bill at Nigeria’s House of Representatives, NEPZA tackled section 32 of the bill which mandates the NCS to designate areas within and outside the Customs territory as “Customs control zones” to enforce or administer all related Customs and Excise legislation.

The authority said the phrase “outside the customs territory” “customs control zone” means an Export Processing Zone or Free Zone, suitable to provide a high level of service in terms of traffic flows and clearance demands.

NEPZA argued that making free zones “Customs control zones” would be against the letter and spirit of the NEPZ Act which makes the zones a one-stop-shop process to facilitate ease of doing business and attract more investors.

“Free Zones are areas designated as such by the President to serve as one-stop-shop investment hub wherein incentives are provided in form of tax holidays, simplified Customs and Immigration processes, amongst others, to attract investors.

“The One-Stop-Shop concept, in furtherance of which Regulations were made for all the active Free Zones with the involvement of the Nigerian Customs Service and all relevant stakeholders, would be eroded if the provisions of the bill are allowed”, the Authority noted.

It added that: “by providing regulations for the free zones, the Nigeria Customs Service would be setting a dangerous precedent, as other agencies would want to do same.”

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The authority further submitted that the proposed sections of the bill which seek to make the Free Zones Customs- Controlled Zones invariably seek to create antithetical Free Zones Customs Territory alien to the global free trade zone model used around the world.

According to a statement on Friday by Martins Odeh, head, corporate communications, NEPZA, the authority stated that it had through the operations of the free zones contributed to the national economy, noting that the Lekki Free Zone Quadrant that comprised Lekki Free Trade Zone, Lagos Free Zone, Dangote Free Zone Enterprises and the Alaro City Free Zone as well as the Calabar Free Zone and the Kano Free Zone were alluring testaments of how it continued to fast track the country’s Industrialisation.

“Dangote Free Zone, a national asset is a zone with enormous prospects for the Nigerian economy. With the heightened insecurity in Nigeria amidst the COVID-19 Pandemic, the introduction of new bureaucratic bottlenecks such as this proposed legal framework would only scare away investors and retard the free trade zone scheme.

“Bureaucratic bottlenecks have been identified as one of the reasons for Nigeria’s low ranking on the World Trade Organisation’s index of Ease of Doing Business. The free zone scheme, therefore, seeks to tackle the problem of corporate investments characterized by bureaucratic challenges, multiple taxations, conflicting regulations,” the statement said.

The authority, however, requested that the proposed Bill should contain provisions to the effect that NEPZA is given 2 percent of the revenue generated by Customs from the Free Trade Zones.