Nkechi David Iwuchukwu
Nigeria has recorded another milestone in its economic diplomacy with the signing of a Comprehensive Avoidance of Double Taxation Agreement (CDTA) with the Hong Kong Special Administrative Region of the People’s Republic of China, a landmark pact expected to strengthen bilateral trade, attract fresh foreign direct investment (FDI), and improve the competitiveness of Nigerian businesses in the Asian market.
The agreement, signed by the Chairman of the Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, on behalf of the Federal Government of Nigeria, and Hong Kong’s Secretary for Financial Services and the Treasury, Christopher Hui, seeks to eliminate the incidence of taxing the same income in both jurisdictions while enhancing tax certainty, promoting transparency and preventing tax evasion.
The development comes at a critical period when President Bola Ahmed Tinubu’s administration is pursuing wide-ranging fiscal reforms aimed at diversifying the economy, expanding non-oil revenue, improving the investment climate and positioning Nigeria as Africa’s preferred investment destination.
Experts described the agreement as one of the most significant international tax arrangements entered into by Nigeria in recent years.
For decades, multinational companies and investors operating between Nigeria and Hong Kong faced the challenge of double taxation, whereby profits generated in one jurisdiction could also be subject to tax in another.
It is believed that such situations often discouraged investment, reduced business profitability and increased the cost of cross-border operations.
The new treaty removes that uncertainty by providing clear rules on how different categories of income, including dividends, interest, royalties, business profits and capital gains, will be taxed. It also provides mechanisms for resolving tax disputes and preventing discriminatory tax treatment.
Analysts believe this certainty will encourage multinational corporations to expand operations while providing Nigerian companies with greater confidence to explore opportunities across Asia.
Hong Kong occupies a unique position in global commerce. Recognised as one of the world’s leading international financial centres, it serves as a gateway to mainland China and the wider Asia-Pacific region.
With world-class banking institutions, sophisticated capital markets, efficient logistics infrastructure and one of the busiest container ports globally, Hong Kong has long attracted multinational corporations seeking access to Asian markets.
For Nigeria, whose exports remain heavily dependent on crude oil, the agreement presents an opportunity to diversify trade by increasing exports of agricultural products, solid minerals, manufactured goods, creative products and professional services.
The treaty is also expected to encourage Hong Kong-based investors to participate in Nigeria’s infrastructure, manufacturing, fintech, renewable energy, healthcare, maritime and technology sectors.
The agreement aligns with ongoing reforms introduced by the Federal Government to modernise Nigeria’s tax administration and improve revenue mobilisation without imposing excessive tax burdens on businesses.
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