Through the passage of the Special Technology Zone Authority Act, 2021, by the National Assembly, the federal government has granted a 10-year tax exemption to Zone developers and businesses.
According to documents, the government has exempted all types of income taxes under the income tax legislation, including the tax on profits and gains, income tax, turnover tax, withholding tax, capital gain tax, income tax on dividend income, and dividend withholding tax.
Similarly, the government exempted all capital items from sales tax and customs duty under the Sales Tax Act 1990 and the Customs Act 1969, respectively.
In addition, property tax and dividend income exemptions, as well as a capital gain for any venture capital fund obtained from investments in zone developers and firms, have been permitted.
In addition, permission to open and maintain a foreign currency account, foreign currency availability, full convertibility to foreign currency, repatriation and free transfer of foreign currency to meet the needs of investors, lenders, contractors, operators, consultants, insurers, reinsurers, vendors, and advisors in relation to any compensation amount, in accordance with the fo
For the avoidance of doubt, co-zones developers shall be entitled to the exemptions and incentives from the date of issuance of a license for the period of 10 years, the document states.
The government defined Zones as a specific class or type of zone that can be geographical or virtual, new or existing, or an expansion of an existing zone as approved or notified by the authority under the rules, such as special technology zones, information technology parks, high-tech industrial areas, software and hardware technology parks and technology export zones.
It’s worth noting that the National Assembly passed the Special Technology Zone Authority Act, 2021 in its most recent session, and this law will be presented to parliament’s upper house.
The federal government seeks to safeguard the development of the scientific and technological environment by creating technology development zones across the country, according to the paper.
Furthermore, the goal of this law is to attract foreign direct investment, foster collaboration between academia and the technology industry, and increase productivity and lower production costs through high-tech interventions, intensive innovation, and futuristic entrepreneurship, not only to create jobs but also to commercialise technological knowledge.