FIRS Issues Ultimatum to International Shipping Lines: Regularize Tax Position or Face Prosecution

The Federal Inland Revenue Service (FIRS) has issued a directive requiring all maritime companies operating within Nigeria’s territorial waters to rectify their pending tax returns by the deadline of December 31, 2023.

This announcement was communicated through an official public statement, which was released and endorsed by the Executive Chairman of the FIRS, Muhammad Nami.

The FIRS emphasized that this directive follows the issuance of two earlier circulars in June and December of 2021. These circulars outlined the framework for the taxation of international shipping firms and urged them to settle their tax obligations with the FIRS within a three-month period.

The circular also stated that the FIRS had observed that many international shipping lines operating in the country had not been complying with the nation’s extant tax laws.

It said thus,

• “The circular provides the basis of taxation for all international shipping lines in Nigeria and the public notice requested all international shipping lines to regularise their tax affairs with the Federal Inland Revenue Service (FIRS) within three months of the date of that publication”
• “Consequently, the Service hereby requests all international shipping companies operating in Nigerian territorial waters in whatever capacity (containerized, bulk cargo, fishing trawlers, crude oil and natural gas lifting vessels, dredging, survey, floating, production, storage, and offloading, etc.) to immediately regularise their tax positions.”

Enforcement action for defaulting shipping companies

The service noted that it is collaborating with relevant security agencies to prosecute defaulting shipping agencies after December 2023.

• The statement reads, “The Service is collaborating with relevant government regulatory and security agencies in the maritime sector to commence enforcement action on defaulting shipping companies after the expiration of the grace period of December 31, 2023”