FIRS Plans Tax Compliance Audit On Companies Operating In Free Trade Zones

The Federal Inland Revenue Service has sealed a Memorandum of Understanding with the Nigerian Export Processing Zones Authority to improve the level of tax administration in the Free Trade Zones.

The move would enable the FIRS carry out tax compliance audit on all the companies operating in the Free Trade Zones.

The Executive Chairman of FIRS, Muhammad Nami signed the agreement on behalf of the Service while the Managing Director of NEPZA, Professor Adepoju Adesugba signed for his agency.

With this agreement, the FIRS is expected to start receiving returns from enterprises that are in operations in the Nigerian Export Processing Zones.

The FIRS would also have access to the zones to conduct compliance checks.

Enterprises in the Export Processing Zones enjoy complete exemption from tax.

However, the FIRS said the companies are statutorily expected to file returns and these returns help the government to plan and know which taxes it has foregone as incentives.

It is also expected that the companies in the zone act as collection agents of VAT for the FIRS when they do business with companies that are not in the zone.

This MoU would also help the FIRS to breach collaboration gaps between the Service and NEPZA.

Speaking at the signing event, Muhammad Nami, executive chairman of FIRS, said the importance of the agreement was to foster greater collaboration between the two agencies.

He said the intention was to promote the smooth operation of activities or approve enterprises in the zones and ensure effective administration of taxes applicable in the operation of zones under NEPZA.

On his part, Adesugba, said that the MoU is aimed at unbundling and strengthening the tax schedule for compliance purpose in line with section 19 of the NEPZA Act.

He added that the importance of growing the country’s zones in order to grow the nation’s economy could not be over-emphasised.

ENDS