Friday, 7 July 2023

FG announces plan to recover N553 billion in unremitted petroleum shipping taxes

The Nigerian Government revealed that it plans to recover N553 billion in unremitted taxes owed by international petroleum shipping companies operating in Nigeria. 
This was disclosed on Wednesday by the Director, of International Tax, Federal Inland Revenue Service (FIRS), Mr Abdullahi Aliyu during a summit organised by the Nigerian Chamber of Shipping (NCS) themed; “Sensitizing the Nigerian Maritime Industry on the New Tax Policy and Objectives”. 
Aliyu added that said the sum was accrued from 2010 to 2019 and would be beneficial towards increasing government revenue. 
Deficit and unremitted taxes 
The FIRS chief noted that with Nigeria’s budget deficit of N11.34 trillion, the N553 billion unremitted taxes represents 5.03 per cent and would be an alternative to addressing Nigeria’s economic woes instead of borrowing. 
He added 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, he said: 
“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.” 
Postponed clearance 
The Assistant Director, Tax, FIRS, Mr Oluwole Oni, added that the FIRS had advertised the planned taxation exercise in December 2021 to prevent disruptions in the essential global shipping business. He said: 
“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)

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