The Oil and Gas Free Zones Authority has expressed support for a 10-year tax exemption for operators in Nigeria’s oil and gas free zones, citing concerns that an abrupt application of the new tax law could disrupt long-term investments and undermine investor confidence. Managing Director and Chief Executive Officer of OGFZA, Bamanga Jada, made the call during a town hall meeting with the Federal Inland Revenue Service and licensed operators.
The meeting, held in Onne, Rivers State, comes barely a month before the implementation of Nigeria’s new tax act. Jada argued that a 10-year exemption period would provide operators with the necessary “adaptation space” to align with the evolving tax framework while safeguarding investments structured around long-term fiscal incentives. He emphasized that many licensees, including major foreign investors, plan their businesses over 10, 15, or even 25 years, based largely on the incentives in place at the time of investment.
OGFZA has attracted over $24 billion in investments, with energy-focused free zones playing a transformative role in other economies, such as the Jebel Ali Free Zone in Dubai and the Sohar Free Zone in Oman. Jada noted that strong incentives in these jurisdictions have drawn billions of dollars in investments, created large-scale employment, and positioned the host countries as global industrial hubs. Similarly, OGFZA-regulated free zones in Nigeria have secured significant investments, hosted over 200 enterprises, and generated hundreds of thousands of direct and indirect jobs.
The authority commended President Bola Tinubu for his commitment to tax reforms and economic transformation, as well as the Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, for her support and advocacy for the free zones sector. Exports from Nigeria’s oil and gas free zones have surged under the current administration, reaching 496,537,804 metric tonnes and generating significant foreign exchange inflows.
The Executive Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, described the 2025 tax reforms as a critical step towards modernizing Nigeria’s fiscal system and strengthening compliance. He emphasized the importance of transparency, accountability, and proper reporting, particularly for export processing and free trade zones. Stakeholders at the meeting unanimously appealed for the exemption of operators in special economic and free zones from the immediate application of the new tax law, arguing that a transition period is essential for stability and sustained investment in the sector.
Nigeria’s new tax act, expected to take effect in early 2026, will streamline incentives, tighten tax compliance, and phase out some existing waivers. However, free-zone operators argue that abrupt changes could erode the cost advantages that attracted investors in the first place, potentially triggering capital flight and undermining the country’s efforts to increase industrial output, grow non-oil exports, and court global supply chains.
