FIRS Demands Tax Compliance By Crude Lifting Shipping Firms

Date:

November 22, 2023.

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Azonuchechi Chukwu.

The Chairman, Federal Inland Revenue Service (FIRS), Zacch Adedeji, has charged non-domestic companies shipping crude oil from Nigeria to ensure strict compliance with the country’s tax laws in their operations.

Adedeji gave the charge in Lagos at a workshop on taxation of non-resident shipping companies organised by the FIRS in conjunction with Oil Producers Trade Section (OPTS) on Monday.

He said the tax compliance exercise commenced by FIRS on the activities of foreign shipping companies lifting hydrocarbons from Nigeria was part of measures aimed at widening the tax net in order to grow revenue for the government.

The FIRS chairman, according to a statement by his special adviser on media, Dare Adekanmbi, assured the international companies that the agency was only interested in ensuring compliance with extant tax laws and not out to disrupt their operations.

Section 14 of the Companies Income Tax Act (CITA) 2004 (as amended) makes it mandatory for 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.

Adedeji, who prior to his appointment as FIRS chairman was Special Adviser on Revenue to President Bola Tinubu, reminded the companies about how his intervention had earlier led to the six months grace period given to them to regularise their tax returns.

The international shipping companies have up to December 31 this year to reconcile their books with FIRS.

He explained that the purpose of the workshop was to address challenges associated with tax compliance by the foreign companies and find a lasting solution.

The federal government has set a target of increasing Nigeria’s tax to GDP ratio to 18 per cent 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.

“The Service 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.

“I wish to state that 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.

“Please recall that as Special Adviser on Revenue I facilitated an intervention on this matter in June this year.

This 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.

“Furthermore, upon assuming the role of Executive Chairman of FIRS, I emphasised the importance of collaborating with stakeholders to address challenges associated with tax compliance.

“It is in this spirit that this workshop has been organised with various stakeholders in the oil and gas industry and the maritime sector.

“I assure everyone that FIRS, as an institution, is open to a transparent and fair resolution of assessment notices served on any taxpayer.

“Nevertheless, if required the Service is prepared to enforce Nigerian tax laws without violating the rights of any taxpayer,” Adedeji said.

The workshop was attended by members of the International Association of Independent Tanker Owners (INTERTANKO), International Chamber of Shipping, Independent Petroleum Petroleum Producers Group, government agencies and tax advisers among others.(www.naija247news.com).

Azonuchechi Chukwu
Azonuchechi Chukwuhttps://gravatar.com/azonuchechivchukwu
Azonuchechi Chukwu - Business Journalist at Naija247news.com Azonuchechi Chukwu is a seasoned business journalist contributing to the insightful coverage of economic and financial news at Naija247news.com. With a passion for unraveling the complexities of the business world, Azonuchechi brings a wealth of expertise and dedication to his role. As a Business Journalist, Azonuchechi specializes in providing comprehensive analyses of market trends, corporate developments, and economic indicators. His in-depth reports offer Naija247news.com readers a nuanced understanding of the forces shaping the Nigerian and global business landscapes. Azonuchechi Chukwu's commitment to journalistic excellence is evident in his ability to translate complex financial information into accessible and engaging narratives. Whether exploring stock market fluctuations, corporate strategies, or economic policies, he strives to deliver content that empowers readers with valuable insights. With an educational background in business and a keen interest in the intersection of finance and technology, Azonuchechi stays at the forefront of industry dynamics. His coverage extends beyond traditional financial reporting, encompassing the dynamic realms of fintech, entrepreneurship, and sustainable business practices. Azonuchechi Chukwu's work goes beyond the surface, aiming to foster financial literacy and awareness among Naija247news.com's audience. By demystifying economic complexities and shedding light on emerging opportunities, he plays a pivotal role in keeping readers well-informed in the fast-paced world of business. As Naija247news.com's Business Journalist, Azonuchechi Chukwu continues to make meaningful contributions to the platform's mission of delivering timely, accurate, and relevant business news to its diverse audience. His dedication to journalistic integrity and his ability to navigate the intricacies of the business realm make him an invaluable asset to the Naija247news.com team.

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