OGFZA Backs 10-Year Tax Exemption for Oil, Gas Free Zone Operators

By Okuwakemi Kindness

The Oil and Gas Free Zones Authority (OGFZA) has supported calls for a 10-year exemption for operators in oil and gas free zones from the new tax law.

OGFZA Managing Director and CEO, Bamanga Umar-Jada, made the call in Onne, Rivers State, during a town hall meeting with the Federal Inland Revenue Service (FIRS) and OGFZA licensees.

Jada said the proposed extension would give operators the needed “adaptation space” to transition and comply with evolving tax requirements.

“Accordingly, OGFZA supports the call for a ten-year extension of existing tax incentives, coupled with a phased implementation to mitigate potential disruptions.

Many of our licensees, including prominent foreign investors, formulate strategies spanning 10, 15 or even 25 years, based on prevailing incentives,” he said.

He added that the transitional period would reinforce the Renewed Hope Agenda and ensure policy consistency, which he described as critical for attracting sustained investment.

Over $24bn Investments in Free Zones

Jada disclosed that Nigeria’s free zones have attracted over $24 billion in investments, highlighting their strategic importance to the economy.

“Energy-oriented free zones have been pivotal in driving development in several countries, as seen in the Jebel Ali Free Zone in Dubai and the Sohar Free Zone in Oman,” he said.

He noted that OGFZA-regulated free zones in Nigeria have secured more than $24 billion in investments, host over 200 enterprises, and have generated hundreds of thousands of direct and indirect jobs.

Exports Rise Under Tinubu

Jada commended President Bola Tinubu for his commitment to tax reforms and economic transformation, and acknowledged the Minister of Industry, Trade and Investment, Dr. Jumoke Oduwole, for her support of the sector.

He said exports from Nigeria’s oil and gas free zones have risen to 496,537,804 metric tonnes, generating significant foreign exchange inflows.

“Our operators now supply markets in Brazil, the United States, France, India, the United Kingdom, the Republic of Korea and beyond,” he said.

Jada reaffirmed OGFZA’s readiness to continue collaboration with FIRS to ensure tax reforms are implemented efficiently and fairly.

FIRS: Focus Is Transparency, Not Profit Tax

In his remarks, FIRS Executive Chairman, Dr. Zacch Adedeji, described the 2025 tax reforms as a major step towards modernising Nigeria’s fiscal framework.

Represented by his Special Adviser on Tax Incentives, Dr. Cletus Adie, Adedeji said the introduction of a tax clearance certificate as a requirement for licence renewal was critical.

“For export processing and free trade zones, the focus is not on taxing income or profits, but on promoting transparency, accountability and proper reporting,” he said.

He added that compliance would help free trade zones contribute more effectively to national development, noting that persistent non-compliance by some enterprises had necessitated stricter administrative measures under the law.

Stakeholders Seek Transition Period

Stakeholders at the meeting unanimously called for the exemption of operators in special economic and free zones from the new tax law to allow for a smooth adjustment period.