New Telegraph

Ship owners at crossroads over14% duty, tax

Ship owner have said that the import duty estimated at 14 per cent and tax laws have created obstacles for them to compete with foreign shipping lines operating on Nigerian waters.
They said that if the government reviews the fiscal framework, the maritime industry would contribute more to the nation’s Gross Domestic Products (GDP).
Last year, ship owners spent about N1.24 trillion ($3.42billion) to import vessels and spare parts into the country from China, Hong Kong, Singapore, Japan and Greece,
The vessels are being used in the downstream sector to provide huge logistics for energy demand.
Some of the vessels include the  Security Patrol Vessels (SPV), Platform Supply Vessels (PSV),Line Handling Tug (LHT), Anchor Handling Tug (AHT) and Crew Boats (CB), Barges(VB), Tug Boats (TB), Security Patrol Vessels (SPV), Jack-up barges (JUB) and Crew Boats (CB),Water Bus (WB) andSupport Vessel (SUV).
Worried by the huge spending, the ship owners said that Nigeria should emulate where shipping was a major revenue earner, noting that revenues from shipping in 2015-2018 exceeded an average of over $13.5 billion yearly.
According to a former President of the Ship Owners’ Association of Nigeria (SOAN), Greg Ogbeifun, ever since the National Shipping Line (NNSL) was liquidated, the country had lost all the accruable economic benefits like job creation, skills and human capacity development and training opportunities
He stressed that the country was unable to articulate a replacement modality, whether privately or publicly-owned or Public-Private Partnership (PPP) arrangement.
Ogbeifun added that a committee set up by the Ministry of Transportation to explore the re-establishment of a national fleet had not yielded the desired result.
Also, a former President, the Merchant Navy Senior Staff Association, Matthew Alalade, frowned at the over-dependence of Nigeria on foreign vessels for the affreightment of the nation’s import, cargoes and training of cadets.
He noted that when the National Shipping Policy was enacted in 1984, a minimum of 40 per cent was targeted as the volume of goods to be lifted by Nigerian-owned vessels, however, he said that mismanagement and corruption killed the National Shipping Line.
He explained that due to the lack of a national carrier, Nigeria had lost trillions of naira to foreign ships and experts who lift its cargoes
Also, the Executive Secretary of the Nigeria Shippers Council (NSC), Hassan Bello, stressed that Nigeria spent so much as $17billion yearly on freight.
Bello, who is also the Chairman, National Fleet Implementation Committee, set up by the Ministry of Transportation, said while the national fleet was private sector-led stressed the need to remove all the stumbling blocks.
He said: “My committee has been pushing to get pioneering status for national fleet, that is, for Nigerians to own and operate ships and if we get some initial, but for the Covid-19, we will now push more incentives, that is, tax incentives and exemption from customs duty for the ship we are going to bring.
“If we are to have Nigeria on the list and if we have a fleet according to Nigerian Maritime Administration and Safety Agency (NIMASA) Act, the fleet will be given the status of a national carrier, which means they will have priority in project cargoes, that cargoes belonging to federal, state and local governments.”
Meanwhile, the Federal Ministry of Transportation had said that it would consider some tax incentives for the maritime industry.
The proposed incentives include zero import duty for brand new vessels imported by Nigerians or Nigerian shipping companies for use in foreign or domestic trade; 0.5 per cent only import duty for vessels aged between one and five years intended for use in foreign or domestic trade; and one per cent only import duty for vessels aged between five and eight years intended for use in foreign or domestic trade.

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