Zach Adedeji, the Federal Inland Revenue Service (FIRS) chairman, 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 FIRS in conjunction with the Oil Producers Trade Section (OPTS) on Monday.
He said the 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 to grow revenue for the government.
According to a statement by Dare Adekanmbi, his Special Adviser on Media, the FIRS chairman assured the international companies that the agency was only interested in ensuring compliance with extant tax laws and not out to disrupt their operations.
Adedeji, who before he was appointed FIRS chairman was Special Adviser on Revenue to President Bola Tinubu, reminded the companies about how his intervention had earlier led to the six-month grace period given to them to regularise their tax returns.
According to him, the international shipping companies have to reconcile their books with FIRS up to December 31 this year. He explained that the workshop’s purpose was to address challenges associated with compliance by foreign companies and find a lasting solution.
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 running their businesses within the country.
He said: “The Federal Government has set a target of increasing Nigeria’s tax-to-GDP ratio to 18 percent 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 aligns with this broadening tax net strategy.
“I am sure all the international shipping companies that we contacted know the importance of complying with tax laws in their various jurisdictions. Therefore, I urge the international shipping companies not complying with Nigerian tax laws to begin doing 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.”
He said that the service is aware of the sector’s economic importance and has no intention of disrupting operations. Rather, the objective is to instill 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 country’s revenue. The grace period will expire at the end of this year.
“I assure everyone here 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.
Source- Business Day Newspaper.