Adedapo Adesanya
By Adedapo Adesanya
Nigeria has charged foreign companies shipping crude oil from Nigeria to ensure strict compliance with the country’s tax laws in their operations.
This direction was given by the chairman of the Federal Inland Revenue Service (FIRS), Mr Zacch Adedeji, ordering them to ensure that they comply by regularising their tax documents by December 31, 2023.
Mr Adedeji gave the charge in Lagos at a workshop on taxation of non-resident shipping companies organised by FIRS in conjunction with the Oil Producers Trade Section (OPTS) on Monday.
He said the tax compliance exercise commenced by FIRS on the activities of foreign shipping companies lifting hydrocarbons from Nigeria was part of measures aimed at widening the tax net to grow revenue for the government.
The FIRS chairman, according to a statement by his Special Adviser on Media, Mr Dare Adekanmbi, assured the international companies that the agency was only interested in ensuring compliance with extant tax laws and not out to disrupt their operations.
Section 14 of the Companies Income Tax Act (CITA) 2004 (as amended) makes it mandatory for foreign companies engaging in shipping and air transport operations in Nigeria to file tax returns to continue to carry out their businesses within the country.
Mr Adedeji, who before his appointment as FIRS chairman was Special Adviser on Revenue to President Bola Tinubu, reminded the companies about how his intervention had earlier led to the six-month grace period given to them to regularise their tax returns.
He explained that the purpose of the workshop was to address challenges associated with tax compliance by foreign companies and find a lasting solution.
“The Federal Government has set a target of increasing Nigeria’s tax-to-GDP ratio to 18 per cent within the next three years.
“The goal is to achieve this without imposing additional taxes but by broadening the tax net. The compliance exercise on international shipping companies lifting crude oil from Nigeria is in line with this strategy of broadening the tax net.
“I am sure all the international shipping companies that we contacted are aware of the importance of complying with tax laws in the various jurisdictions they operate.
“Therefore, I urge the international shipping companies that are not complying with Nigerian tax laws to begin to do so immediately.
“The Service has noted the concerns raised by stakeholders in the oil and gas industry and the maritime sector regarding the tax compliance exercise initiated on international shipping companies lifting crude oil from Nigeria.
“I wish to state that the Service is aware of the economic importance of the sector and has no intention of disrupting operations, rather the objective is to instil compliance with Nigerian tax laws.
“Please recall that as Special Adviser on Revenue, I facilitated an intervention on this matter in June this year.
This resulted in the six-month grace period granted to non-resident shipping companies to regularise their tax affairs and contribute their fair share to the revenue of the country. The grace period will expire at the end of this year.”
“Furthermore, upon assuming the role of Executive Chairman of FIRS, I emphasised the importance of collaborating with stakeholders to address challenges associated with tax compliance.
“It is in this spirit that this workshop has been organised with various stakeholders in the oil and gas industry and the maritime sector,“ he added.
