The Commissioner of the Federal Inland Revenue Service (FIRS), Zac Adedeji, has ordered non-domestic companies transporting crude oil from Nigeria to ensure strict compliance with the country’s tax laws in their operations.
Mr. Adeji made the remarks on Monday in Lagos at a workshop on taxation of non-resident shipping companies organized by FIRS in collaboration with the Oil Producers Trade Section (OPTS).
He said the tax compliance exercise launched by the FIRS against the activities of foreign shipping companies transporting hydrocarbons from Nigeria was part of measures aimed at widening the tax net to increase government revenue. Ta.
According to a statement by Special Adviser on Media Affairs Der Adekambi, the FIRS Chairman assured international companies that FIRS is only interested in ensuring compliance with current tax laws and has no intention of interfering with their operations.
Section 14 of the Companies Income Tax Act 2004 (CITA), as amended, requires foreign companies engaged in maritime and air transport business in Nigeria to file tax returns in order to continue operating in the country .
Mr. Adedeji, who served as Special Adviser on Revenue to President Bola Tinubu before being appointed as FIRS Chairman, explained how his intervention contributed to the six-month grace period given to businesses to regularize their tax returns. Reminding companies of what led to this.
International shipping companies have until December 31st this year to reconcile their books with FIRS.
He explained that the objective of the workshop was to address challenges related to tax compliance by foreign companies and find lasting solutions.
“The Federal Government has set a target to increase Nigeria’s tax-to-GDP ratio to 18% within the next three years.
“The goal is to achieve this by widening the tax net without imposing additional taxes. Ensuring compliance for international shipping companies transporting crude oil from Nigeria is essential to this strategy of widening the tax net. It is in line with this.
“We believe that all the international shipping companies we have contacted recognize the importance of complying with tax laws in the various jurisdictions in which they operate.
“We therefore urge international shipping companies that are not complying with Nigeria’s tax laws to start complying immediately.
“The Agency has noted concerns raised by stakeholders in the oil and gas industry and maritime sector regarding the tax compliance exercise initiated against international shipping companies transporting crude oil from Nigeria.
“I would like to state that the Service recognizes the economic importance of the sector and has no intention of disrupting operations, rather the objective is to instill compliance with the Nigerian tax laws.
“Recall that, as Special Adviser to Revenue, I facilitated intervention in this matter in June this year.
“As a result, non-resident shipping companies will be given a six-month grace period to regularize their tax operations and contribute their fair share to the national revenue. The grace period will end at the end of this year. do.
“Furthermore, upon assuming the role of Executive Chairman of FIRS, I emphasized the importance of working with stakeholders to address challenges related to tax compliance.
“In this spirit, this workshop was held in collaboration with various stakeholders from the oil and gas industry and the maritime sector.
“FIRS, as an institution, would like to assure everyone here that we are open to transparent and fair resolution of assessment notices served on every taxpayer.
“Yet, if necessary, we remain ready to enforce Nigeria’s tax laws without infringing on the rights of taxpayers,” Adedeji said.
The workshop was attended by members from the International Association of Independent Tanker Owners (INTERTANKO), the International Chamber of Shipping, independent oil producers groups, government agencies, tax advisors and others.