Nigeria Pursues N533bn Unremitted Shipping Taxes

July 7, 2023
Nigerian Navy Ship KADA

By Adedapo Adesanya 

Nigeria intends to recoup over N553 billion in unremitted taxes from international petroleum shipping companies operating in the country, says the Federal Inland Revenue Services (FIRS)

This was posited by the Director of International Tax of the agency, Mr Abdullahi Aliyu, at a virtual summit organised by the Nigerian Chamber of Shipping (NCS) on Wednesday, themed Sensitising the Nigerian Maritime Industry on the New Tax Policy and Objectives.

He said that recouping the sum which accrued from 2010 to 2019 would help address the nation’s budget deficits.

Mr Aliyu said that these unremitted shipping taxes would reduce the country’s overall budget deficit of N11.34 trillion by 5.03 per cent.

Mr Aliyu, however, noted that shipping companies involved in dry cargo activities in Nigeria and foreign airlines had been complying with the tax laws that most operators in the oil sector had neglected.

“The onus is on global businesses to understand the local laws and taxation in the countries where they transact business, and these specific laws have been in place in the nation for decades.

“Nigerian taxes are more favourable to non-residents compared to indigenous companies, thereby creating an unfair business environment for local operators,” he said.

On his part, the Assistant Director, Tax, FIRS, Mr Oluwole Oni, during a paper presentation, pointed out that the agency had advertised the planned taxation exercise in December 2021 to prevent disruptions in the essential global shipping business.

“Non-resident vessels earn freight income from transportation services provided in transporting petroleum products (crude oil and gas products) from Nigeria to the agreed location outside of Nigeria.

“Irrespective of the commercial arrangement adopted by the non-resident vessels to lift crude oil from Nigeria, freight income attributable to Nigeria is taxable in line with the Companies Income Tax Act (CITA),” he said.

Mr Oni said that the FIRS had written officially to operators who owed taxes for the period between 2010 and 2019, adding that the companies were expected to send in their responses within 30 days.

“Those who received the letters are expected to send in their responses which aren’t only about payment. The response can be an acknowledgement of receipt, a demand for clarification, or payment.

“The first step to compliance is registration with FIRS, and most operators are yet to register,” Mr Oni said.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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