In this newsletter, the authors examine the impact of the Nigeria Tax Act 2025 (NTA) on the Nigeria Export Processing Zones (NEPZ) Act and the Oil and Gas Export Free Zone (OGEFZ) Act. The NTA, effective from 1 January 2026, repeals certain blanket exemptions previously granted to approved enterprises in these zones, especially sections 8 and 18(1)(a) of both Acts which exempted entities from all federal, state, and local government taxes and foreign exchange regulations. Under the new regime, only profits from approved entities in export processing zones that are genuinely export-oriented will be exempt from tax, and this exemption is limited to entities that export most of their production, with sales to the Nigerian customs territory capped at 25%. Entities exceeding this threshold will be taxed on all profits derived from sales to the customs territory.
The newsletter further explains that, while enterprises in export processing zones will continue to enjoy incentives such as customs duty exemptions and VAT waivers on approved activities, export free zone entities under the OGEFZ Act will no longer enjoy income tax exemptions, even where they export 100% of their production. The NTA also introduces minimum effective tax requirements for large companies, transfer pricing rules for cross-border service arrangements, and annual compliance obligations tied to evidence of export proceeds. Overall, the NTA restores the original legislative intent of promoting export-oriented business within the zones, but it creates significant changes to the tax treatment of approved entities, highlighting the need for clarity on which version of the Act is authoritative given the circulation of differing texts.
