Committee Makes Recommendations for Smooth FTZ Operations

By Adedapo Adesanya

The tripartite of the Acting Comptroller-General of Customs, the Managing Director/CEO of the Nigeria Export Processing Zones Authority (NEPZA) and the Managing Director/CEO of the Oil and Gas Free Zone Authority (OGFZA) have received a six-point recommendation report on the Free Trade Zones Operational Remodelling.

The committee was constituted on July 28 when Mr Adesoji Adesugba, MD/CEO of NEPZA, his counterpart, Mr Tijjani Kaura MFR MD/CEO OGFZA, and Mr Toyin Elegbede, Exeutive-Secretary of the Nigeria Economic Zones Association (NEZA) visited the Acting Customs chief, Mr Bashir Adewale Adeniyi to demand the streamlining of customs’ operations within the free zones.

The report was presented by Mr Toyin Elegbede, Chairman of the committee, who expressed delight in the confidence reposed on the members of the committee to undertake the onerous assignment.

He stated that the prompt implementation of the committee’s report would help reposition the scheme for a greater impact on the economy.

“While I thank you, the Acting Comptroller-General of Customs, the Managing Directors/CEOs of NEPZA and OGFZA, on behalf of other members of the committee for the confidence reposed on us to carry out this assignment, please permit me to present the Report of the committee for your consideration,’’ Mr Elegbede said.

The recommendations included the stoppage of irregular invitations of Free Zone Enterprises to the customs headquarters on procedural matters that should be handled by the Area Controllers, including approval for local purchases, rents and hires.

The committee also prescribed the immediate integration of all Free Zone Enterprises into the IM5 (5900) customs operations portal and to redesign it to resolve the VAT implication for sales to the Customs territory.

The recommendation further requested the immediate formulation of SOPs and Procedure Codes for both Intra and Inter Zone Sales, Imports of vehicles, capital goods, spare parts, equipment, furniture, and fixtures destined for consumption within the free zone.

Furthermore, the committee requested the service to allow the exports of finished and processed goods containing 100 per cent local raw materials with minimum stipulated VAT either mentioned in the Import Prohibition list of customs or in the 44 restricted items of the Central Bank of Nigeria (CBN) FX ban list.

In addition, the committee recommended the immediate creation of Procedure Codes that would kickstart the implementation of the Federal Ministry of Finance Circular No. F182079 dated December 22, 2022, and letter Ref. No. HMFBNP/NCS/LPG/10/2022 dated October 4, 2022, respectively, on some specific incentives.

The report listed the incentives to include a 75 per cent Duty Rebate for approved products in Oil and Gas gas-free zones and the exemption of domestic production and sale of LPG from customs duty and VAT.

The rest of the incentives are to comply with regulatory procedures provided in OGFZA and NEPZA Regulations with respect to inspection of free zones containers without the knowledge of the Authorities, delay in the inspection of cargo, stoppage of cargo in transit, and raising queries on importation of same as well as posting of customs officers to the free zones without the knowledge of the two Authorities.

Finally, the committee recommended expeditious harmonization of all the areas of conflict contained in the legal frameworks of NCS, NEPZA, and OGFZA, respectively.

The customs boss promised to immediately adopt those recommendations that fell within the operational policy of the service for implementation.

“We must do what is necessary to boost the economy. I was worried to hear that some of our actions had inhibited the free flow of revenues from the scheme.

“We were meant to have a coordinated collaboration and cooperation to ensure the country obtains significant benefits from the free zone scheme. All hands must now be on deck to make that happen.

“In demonstrating our commitment to streamline our policy and operations for effective management of the free zones, I wish to suggest that this committee is converted to become the Implementation Committee that will midwife the implementation of these recommendations. I wish to thank all of you for a job well done,’’ the Acting CGC said.

On their parts, Mr Adesugba and Mr Kaura applauded the genuine commitment of the new customs boss toward addressing all the listed conflict areas, noting that the two regulatory bodies and the entire free trade zones’ stakeholders through NEZA would scale up collaboration with the service to make the scheme more attractive.