Amidst concerns of tax evasion and dwindling indigenous capacity in Nigeria’s oil and gas shipping sector, industry stakeholders are calling for the cessation of a substantial $10 billion annual support provided to foreign shipping companies.The Newtelegraphng source.
- Stakeholders demand ending $10B support for tax-evading foreign shipping firms in Nigeria’s oil sector.
- Indigenous capacity weakened as foreign firms evade taxes; funds should boost infrastructure.
- Urgent deadline set for international shipping lines to settle taxes or face enforcement actions.
Industry Stakeholders Demand
In the wake of a looming December 31, 2023 deadline set by the Nigerian government for shipping companies to settle their outstanding tax dues, stakeholders within the shipping industry are vehemently advocating for the discontinuation of a staggering $10 billion annual financial aid extended to foreign shipping companies operating in the country’s oil and gas sector. The driving force behind this call is the pervasive issue of tax evasion by these foreign entities.
Nigerian Shipping Sector’s Dependency
Chief Vickson Aghanenu, President of the Association of Chandlers and Ship Suppliers of Nigeria (ACSSN), has revealed that a vast fleet of over 10,000 ships, ranging from container vessels and tankers to Floating Production Storage Offloading (FPSO) vessels and oil rigs, navigate Nigerian waters every year. Surprisingly, the Federal Government allocates a substantial $10 billion annually to support foreign companies rendering services that could be potentially provided by Nigerian entities within the upstream sector. The crux of the matter lies in the foreign companies’ alleged tax evasion practices.
Strained Indigenous Capacity
Jayeola Ogamode, Managing Director of Sceptre Consult, underscores the fact that despite the enactment of the Local Content Act, the country’s indigenous capacity and local content policy have remained inadequately reinforced. Rather than channeling this substantial financial aid toward foreign companies, Ogamode argues that the funds should be dedicated to essential infrastructure projects. To rectify the situation and recover the lost revenue, he advocates for the establishment of a task force to swiftly collect the unpaid debts.
Urgent Actions Proposed
In light of the impending deadline for tax compliance, industry experts emphasize the immediate need for stringent measures to counteract tax evasion by international shipping lines. The Federal Inland Revenue Service (FIRS) has issued a stern warning to these companies, urging them to rectify their tax affairs by December 31, 2023, or face punitive measures. This call to action comes in response to a pattern of non-compliance observed since December 17, 2021, when the tax obligation was initially imposed. FIRS Executive Chairman, Muhammad Nami, further underlines that the collaboration between FIRS and relevant government bodies within the maritime sector is poised to enforce compliance through necessary means after the grace period concludes.
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Source-newtelegraphng
