In a dedicated effort to uphold stringent adherence to the nation’s tax regulations, Zacch A. Adedeji, the Executive Chairman of the Federal Inland Revenue Service (FIRS), has urged international shipping companies operating in Nigeria to ensure the reconciliation of their financial records with the Service before December 31, 2023.
The directive was issued by Adedeji during a workshop on the taxation of non-resident shipping companies held in Lagos. The workshop, organized by FIRS in collaboration with the Oil Producers Trade Section (OPTS), took place on Monday, as reported by Dare Adekanmbi, the special adviser on media to the FIRS Chairman.
Adedeji clarified that the ongoing tax compliance initiative targeted at foreign shipping companies engaged in transporting hydrocarbons from Nigeria was not designed to disrupt their operations. Instead, it was a strategic measure aimed at broadening the tax base to enhance government revenue.
Highlighting the legal basis for his directive, Adedeji pointed to Section 14 of the Companies Income Tax Act (CITA) 2004 (as amended). This section mandates foreign companies involved in shipping and air transport operations in Nigeria to file tax returns, ensuring the continuation of their business activities within the country.
The FIRS Chairman underscored that the intervention initiated upon his assumption of duty had previously granted a six-month grace period for international shipping companies to regularize their tax returns. Emphasizing the urgency, he reiterated that they now have until December 31 of the current year to reconcile their financial records with FIRS.
Adedeji conveyed the government’s overarching objective of increasing Nigeria’s tax-to-GDP ratio to 18% within the next three years without imposing additional taxes. The compliance exercise on international shipping companies aligns with this strategy of broadening the tax net.
Addressing concerns from stakeholders in the oil and gas industry and the maritime sector, Adedeji assured that FIRS had no intention of disrupting operations. Instead, the goal was to instill compliance with Nigerian tax laws. He urged non-compliant international shipping companies to promptly adhere to Nigerian tax laws.
The FIRS boss acknowledged the economic significance of the sectors involved and stressed the importance of collaboration with stakeholders to address challenges associated with tax compliance. He reassured attendees at the workshop that FIRS is open to transparent and fair resolutions of assessment notices, while also affirming the Service’s preparedness to enforce Nigerian tax laws without violating taxpayers’ rights if necessary.
The workshop drew participants from various sectors, including members of the International Association of Independent Tanker Owners (INTERTANKO), the International Chamber of Shipping, the Independent Petroleum Producers Group, government agencies, and tax advisers.
