NLNG in Fresh Bid to Settle Tax Dispute with NIMASA

NLNG in Fresh Bid to Settle Tax Dispute with NIMASA

0

There are fresh plans to settle the tax dispute between the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigeria Liquefied Natural Gas Limited (NLNG). The issue has lingered since 2013.

NLNG Managing Director/Chief Executive Officer, Babs Omotowa told journalists that the company plans to urge the Transportation Minister Rotimi Amaechi and NIMASA Director-General Dakuku Peterside to engage the lawyers handling the case to fast-track it so that the court will give its judgment and end the feud.

“We have met with the Minister of Transportation, Rotimi Amaechi and explained the situation to him. He was keen to see how he can work and get NIMASA to work with us to get the case resolved because for us, the more important thing is to resolve the case.

“Whatever the court says will stand. If the court says we are right, we do it, and if it says we are wrong, so be it but at least let there be a legal decision on it.

“Amaechi was supportive of trying to work with us to be able to get the lawyers to let the case be heard and that way it will be followed up. Now that there is a new director-general in NIMASA, we plan to meet with him and the minister to get all the lawyers to let the case be heard and not just continue to linger,” Babs Omotowa said.

NLNG and NIMASA had been locked in legal battle since 2013 over the issue of non-payment of certain statutory levies and charges which NIMASA claims are due to it from the NLNG. NIMASA wants to be collecting the three per cent of gross freight earnings or any other sums further to section 15(a) of NIMASA Act 2007 on all of NLNG’s international inbound or outbound cargo ships.

The NLNG (fiscal incentives, guarantees and assurances) Act gave a pioneer status to the Company and Section 2 gave it a tax relief period of 10 years. As stated, “Notwithstanding the provisions of section 10 of the Industrial Development (Income Tax Relief) Act, the tax relief period of the company shall commence on the production day of the company and shall continue for a period of 10 year. However, the tax relief period shall terminate when the cumulative average sales price of liquefied natural gas reaches $3 per Million Metric British Thermal Units as calculated in the First Schedule to this Act in accordance with which such calculation shall only be made annually at each anniversary date.”

The NLNG Act further states, “Without prejudice to any other provision contained herein, neither the Company nor its shareholders in their capacity as shareholders in the Company, shall in any way be subject to new laws, regulations, taxes, duties, imposts or charges of whatever nature which are not applicable generally to companies incorporated in Nigeria or to shareholders in companies incorporated in Nigeria.”

The Act establishing NIMASA – that is NIMASA Act 17 of 2007 merged the National Maritime Authority and the Joint Maritime Labour Industrial Council (JOMALIC).  Section 2 (1) of the Act states: “This Act shall apply to ships, small ships and crafts registered in Nigeria and extend to ships, small ships and crafts flying a foreign flag in the exclusive economic zone, territorial and inland seas, inland waterways and in the ports of the Federal Republic of Nigeria. But it further said that, “This Act does not extend to warships and military patrol ships,” which are the only ships exempted from NIMASA’s jurisdiction.

On funding of NIMASA, the Act provides that the organisation “shall be funded by monies accruing to it from three per cent of gross freight on all international inbound and outbound cargo from ships or shipping companies operating in Nigeria among others.”


Don't Miss A Thing!
Want to get the latest gist in the energy, oil and power sector around Africa? Submit your email and get all the inside scoop!

Leave A Reply

Your email address will not be published.