The Federal Inland Revenue Service (FIRS) has revealed that international petroleum shipping companies owe the federal government N553 billion in taxes.
Director, of International Tax, Federal Inland Revenue Service (FIRS), Abdullahi Aliyu disclosed this during a summit organised by the Nigerian Chamber of Shipping (NCS).
According to him, the debt was accumulated between 2010 and 2019.
He said the government was in the process of recovering the money as it would be beneficial towards increasing government revenue.
Aliyu noted that with Nigeria’s budget deficit of N11.34 trillion, the N553 billion unremitted taxes represents 5.03 per cent and would be an alternative to addressing Nigeria’s economic woes instead of borrowing.
He, however, pointed out that shipping companies involved in dry cargo activities in Nigeria and foreign airlines had been complying with the tax laws that most operators in the oil sector had neglected.
The director reiterated the need for global businesses to understand the local and taxation laws in the countries they do business.
In his remarks, the Assistant Director, Tax, FIRS, Oluwole Oni, said that the FIRS had advertised the planned taxation exercise in December 2021 to prevent disruptions in the essential global shipping business.
“Non-resident vessels earn freight income from transportation services provided in transporting petroleum products (crude oil and gas products) from Nigeria to the agreed location, outside of Nigeria.
“Irrespective of the commercial arrangement adopted by the non-resident vessels to lift crude oil from Nigeria, freight income attributable to Nigeria is taxable in line with the Companies Income Tax Act (CITA),” he added.
