FG gives vessel owners six months for tax compliance, account reconciliation

To ensure tax compliance, the federal government has announced a grace period of three months for non-resident vessel owners to reconcile their tax obligations.

A six-month grace period was equally given to vessel owners who are yet to reconcile their accounts and fulfil tax obligations to clear their outstanding tax bill, said to be running into millions of dollars.

Reports said many of the vessel owners avoided the nation’s port due to tax concerns in the recent past.

According to the Special Adviser on Revenue to the President, Zaccheaus Adedeji, the decision was made following an interactive session involving key stakeholders, including oil and gas regulators, the Nigerian National Petroleum Corporation (NNPC), the Federal Inland Revenue, and representatives from the Presidency.

“We have agreed to give the parties three months to come to the conclusion, and we will also give a grace period of six months when we will not enforce any of these laws, just to allow for reconciliation.

“In essence, no vessel or ship will be detained or delayed. So we give this six-month break to them so that they can reconcile with this technical committee that we set up,” he said.

During the session, concerns were raised regarding a demand notice issued to non-resident vessel owners, which required them to remit back taxes for the past ten years in accordance with Nigerian tax laws.

Fearing potential enforcement actions and their impact on business operations, the parties worked towards a mutually agreeable solution.

Mr Adedeji explained the government’s commitment to upholding the law and not accepting any form of blackmail from tax defaulters.

However, to avoid disrupting the flow of oil and gas products within and outside the country, it was agreed that no vessels or ships would be detained or arrested.

Instead, he said a technical committee would be established to address the concerns of non-resident vessel owners and facilitate the reconciliation of taxes.

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The committee will consist of representatives from regulatory bodies such as NUPRC, NMDRA, NNPC, the Federal Inland Revenue Service, and the presidency, with the support of the Special Advisers on Energy and Revenue. The Federal Inland Revenue will serve as the secretariat for the committee, the official noted.

Bunmi Toyobo, executive director of the Oil Producers Trade Section (OPTS) of the Lagos Chamber of Commerce and Industry, expressed appreciation towards the new development.

The official highlighted the significant contributions of the oil sector, with members and the NNPC collectively responsible for 90 per cent of Nigeria’s oil production, generating 50-60 per cent of government revenue and contributing around 70 per cent to the GDP.

Meanwhile, the grace period provides non-resident vessel owners with an opportunity to reconcile their tax liabilities and engage with the technical committee to ensure future compliance.