The Nigerian Government has directed all international shipping companies operating in the country to reconcile their books with the Federal Inland Revenue Service (FIRS) before December 31, 2023.
Chairman of the Federal Inland Revenue Service, Zacch Adedeji who gave the directive said the revenue service was making efforts to ensure strict compliance with the country’s tax laws by the shipping lines.
The FIRS Chairman gave this 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, according to a statement by Dare Adekanmbi, his special adviser on media.
Adedeji revealed that the tax compliance exercise initiated by FIRS on the activities of foreign shipping companies lifting hydrocarbons from Nigeria was not intended to disrupt their operations, but rather a measure to widen the tax net to grow revenue for the government.
Adedeji noted that his directive was backed by Section 14 of the Companies Income Tax Act (CITA) 2004 (as amended), which mandated 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.
The FIRS boss explained that his intervention upon assumption of duty had earlier led to the six-month grace period given to international shipping companies to regularise their tax returns, emphasising that they have up to December 31 this year to reconcile their books with FIRS.
Adedeji said, “The Federal Government has set a target of increasing Nigeria’s tax-to-GDP ratio to 18% 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.”
He said the FIRS 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.
“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,” he stated.
The FIRS boss recalled that as Special Adviser on Revenue, he facilitated an intervention on the matter in June this year, which 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.
