Foreign crude shippers, the Federal Inland Revenue Service (FIRS) has recently issued a firm directive to foreign companies engaged in the transportation of crude oil from Nigeria, urging them to meticulously adhere to the country’s tax laws governing their operations. This call to compliance was articulated by Zacch Adedeji, the Chairman of FIRS, during a noteworthy workshop conducted in Lagos. This event, centered on the taxation intricacies of non-resident shipping companies, was a collaborative effort between FIRS and the Oil Producers Trade Section (OPTS).
In a statement conveyed by his Special Adviser on Media, Dare Adekanmbi, Adedeji underscored the significance of the tax compliance initiative, characterizing it as a vital component of broader measures intended to expand the tax net and subsequently augment the nation’s revenue. Emphasizing a commitment to non-disruption, Adedeji reassured international companies that FIRS’s primary objective was ensuring adherence to existing tax laws rather than impeding their day-to-day operations, foreign crude shippers.
Pointing to Section 14 of the Companies Income Tax Act (CITA) 2004, Adedeji highlighted the statutory obligation imposed on foreign companies engaged in shipping and air transport operations in Nigeria to file tax returns. This regulatory framework underscores the necessity for compliance for these companies to continue their operations within the country. Adedeji also brought attention to his prior intervention, which resulted in a generous six-month grace period granted to these companies to regularize their tax returns.
The deadline for these international shipping companies to reconcile their financial records with FIRS is set at December 31 of the current year. The FIRS Chairman clarified that the purpose of the workshop extended beyond issuing directives; it sought to address and resolve challenges associated with tax compliance by foreign entities operating in the shipping sector, foreign crude shippers.
Adedeji elucidated the broader context of this taxation initiative within the government’s strategic goals. The Federal Government aims to elevate Nigeria’s tax-to-GDP ratio to 18 percent within the next three years. Significantly, this objective does not hinge on imposing additional taxes but rather on broadening the tax net. The ongoing compliance exercise concerning international shipping companies aligns seamlessly with this strategy of expanding the tax base.
Conclusion: foreign crude shippers
Adedeji urged international shipping companies that might be lagging in compliance with Nigerian tax laws to promptly rectify their status. He emphasized the awareness these companies should possess regarding the importance of adhering to tax laws in the various jurisdictions where they operate.
In acknowledgment of concerns raised by stakeholders in the oil and gas industry and the maritime sector, the FIRS assured that it was cognizant of the delicate balance required between tax compliance initiatives and the overarching interests of these crucial sectors. This dual awareness underscores FIRS’s commitment to fostering an environment where compliance coexists harmoniously with industry imperatives, foreign crude shippers.
