International shipping firms engaged in the transportation of crude oil are required to adhere to Nigeria’s tax regulations

The Federal Inland Revenue Service (FIRS) has charged foreign companies shipping crude oil from Nigeria to comply with the country’s tax laws in their operations.

The Chairman of FIRS, Zacch 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).

Adedeji, in a statement issued by his Special Adviser on Media, Dare Adekanmbi, said the tax compliance exercise commenced by FIRS on the activities of foreign shipping companies lifting hydrocarbons from Nigeria was part of measures to widen the tax net and grow revenue.

He assured the international companies that the agency was only interested in ensuring compliance with extant tax laws and not out to disrupt their operations.

According to the statement, Section 14 of the Companies Income Tax Act (CITA) 2004 makes it mandatory for foreign companies engaging in shipping and air transport operations in Nigeria to file tax returns to continue to operate in the country.

Adedeji, reminded the companies about how his intervention had earlier led to the six-month 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 foreign companies and find a lasting solution.

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 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. 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.