Nigeria Tax Act 2025 sparks NEZA concerns as new rules risk undermining free zones, jobs, and investor confidence in Africa’s largest economy

The Nigeria Tax Act 2025 and the Nigeria Tax Administration Act, 2025, have been welcomed by the Nigeria Economic Zones Association (NEZA) as important steps toward fiscal transparency and revenue assurance.

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However, the group has warned that the reforms may weaken Nigeria’s Special Economic Zones (SEZs) and Free Trade Zones (FTZs), threatening investment, competitiveness, and over 100,000 jobs.

According to NEZA, the new provisions create uncertainty for companies that export 100% of their products from free zones, which may now fall under taxation.

The association cautioned that without careful engagement, the reforms could erode investor confidence, trigger capital flight, and increase consumer costs.

“Free zones already contribute significantly to the Nigerian economy, paying millions in operating licences, container charges, and taxes, while also supporting infrastructure, supply chains, and employment,” NEZA stated.

The group compared Nigeria’s situation to Morocco’s Tanger Med Free Zone, highlighting that policy stability is essential for attracting private investment and boosting exports.

It also reassured the Manufacturers Association of Nigeria that free zones are designed to complement — not compete with — domestic manufacturing.

NEZA called for structured dialogue between stakeholders, including the Presidency, FIRS, NEPZA, OGFZA, and operators, to design transitional measures that protect investor confidence while ensuring government revenue.

It proposed a moratorium or phased implementation of the tax provisions for free zone enterprises.

The association also warned that weakening the free zone framework could see investors relocating to Ethiopia, Kenya, and Ghana, which are actively enhancing their SEZ regimes with incentives and simplified customs processes.

Such moves, NEZA argued, would reduce Nigeria’s competitiveness and deny local businesses the benefits of foreign investment.

“If free zones collapse or investors shift operations abroad, the government risks shrinking its revenue base, undermining employment, and stalling critical infrastructure projects funded through private capital,” it said.

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NEZA reaffirmed its commitment to balancing government revenue goals with investor interests, urging policymakers to adopt an evidence-driven approach that safeguards industrialisation, exports, and long-term economic competitiveness.