The Nigerian government disclosed its plans to recover N553 billion of unpaid taxes from foreign oil shipping companies doing business in the country.
The Federal Inland Revenue Service’s Director of International Tax, Mr. Abdullahi Aliyu, said this on Wednesday at a summit with the topic “Sensitising the Nigerian Maritime Industry on the New Tax Policy and Objectives” that was hosted by the Nigerian Chamber of Shipping.
Recall President Bola Ahmed Tinubu earlier this month, took strong action to resolve the problem of unpaid taxes on crude oil shipping, which has recently caused tank owners to avoid operating in the country.
The head of FIRS noted that the N553 billion in unremitted taxes, which represent 5.03 percent of Nigeria’s budget deficit of N11.34 trillion, would be an alternative to borrowing to address Nigeria’s economic problems.
The money, according to Aliyu’s addition, was accumulated between 2010 and 2019 and will help the government generate more revenue.
He continued by saying that foreign aircraft and shipping firms operating in Nigeria for dry cargo had been abiding by the tax legislation, whereas most oil industry businesses had ignored it.
The responsibility for understanding local laws and taxation in the nations where they conduct business falls on multinational corporations, and the nation has long had these particular regulations in place.
“These particular regulations have been in force in the country for many years, and Nigerian taxes favour foreign enterprises over domestic ones, creating an unfair business environment for local operators.”
The Assistant Director of Tax at the FIRS, Mr. Oluwole Oni, stated that in order to avoid disruptions in the crucial global shipping industry, the FIRS had announced the planned taxation exercise in December 2021.
He stated that: “The transfer of petroleum goods from Nigeria to the specified place outside of Nigeria generates freight income for non-resident vessels.
“Regardless of the commercial agreement used by the non-resident vessels to transport crude oil from Nigeria, the Companies Income Tax Act requires that all freight income attributable to Nigeria be taxed.”
Oni further stated that those who received the letters must submit their comments, which must address more than just payment. An acknowledgment of receipt, a request for clarification, or payment can be the reply.
According to Oni, the majority of operators have not yet registered with FIRS, which is the first step toward compliance.
