In a bid to resolve a long-standing issue, the Federal Government of Nigeria has provided a three-month grace period for owners of vessels to clear their outstanding tax bills, which have accumulated over a period of ten years and amount to millions of dollars. This move comes as several businesses have recently received demands from the Federal Inland Revenue Service (FIRS) for tax payments covering the period from 2010 to 2019, with amounts ranging from $400,000 to $1.1 million per vessel, totaling tens of millions of dollars.
During a press briefing at the State House, the Special Advisers to the President on Revenue, Zaccheaus Adedeji, along with Mele Kyari, the Group Chief Executive Officer (GCEO) of the Nigerian National Petroleum Corporation (NNPC), and Farouk Ahmed, the CEO of the Nigerian Maritime Administration and Safety Agency (NMDPRA), announced the resolution of the issue. They revealed that vessel owners have been granted three months to settle their tax obligations and balance their accounts within six weeks.
Adedeji emphasized the government’s determination to ensure the smooth flow of products in and out of the country while also upholding the law and preventing any form of blackmail by defaulters. He stated that the vessels would not be detained or arrested, as this had caused panic among the owners. Instead, a technical committee comprising representatives from regulatory bodies such as NUPRC, NMDRA, NNPC, FIRS, and the Office of the Chief of Staff, along with the Special Advisers on Energy and Revenue, would be established to address the concerns and reconcile the back taxes. The committee will also devise a process to ensure compliance in the future.
The grace period of three months aims to provide sufficient time for the parties involved to reach a resolution. Additionally, a six-month break has been granted, during which no enforcement action will be taken, allowing for further reconciliation. This means that no vessel or ship will be detained or delayed during this period.
The Federal Government stressed its commitment to maintaining a business-friendly environment in Nigeria. It acknowledged the importance of compliance with tax laws while assuring businesses that the government is open for business and remains receptive to constructive dialogue. The law must be respected, and the government will take appropriate measures to ensure compliance while fostering a conducive environment for investment.
Mr. Bunmi Toyobo, the Executive Director of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry (LCCI), also expressed appreciation for the attention given by the Special Advisers on Revenue and Energy to their concerns. Toyobo highlighted the reluctance of non-resident vessel owners (non-Nigerian ship owners) to come to Nigeria due to potential enforcement of Nigerian tax laws. The resolution of this issue will help create a more favorable environment for their operations.
The establishment of the technical committee marks an important step towards resolving the outstanding tax bills and ensuring compliance going forward. The Federal Government’s proactive approach to addressing this matter demonstrates its commitment to maintaining a fair and transparent business environment while upholding the rule of law.
