Implications of the Finance Act for the Nigerian Maritime Industry

The Implications of the Finance Act for the Nigerian Maritime Industry

The Implications of the Finance Act for the Nigerian Maritime Industry

1. INTRODUCTION
The Finance Act 2020 was enacted by the National Assembly of the Federal Republic of Nigeria to amend eight (8) tax legislation viz Companies Income Tax Act, Value Added Tax Act, Customs and Excise Tariff, etc (Consolidated) Act, Personal Income Tac Act, Capital Gains Tax Act, Stamp Duties Act, Petroleum Profit Tax Act and to provide for the review of tax provisions and make them more responsive to tax reform and for related matters. The amendments made by the Finance Act are intended to raise necessary revenue to defray public expenditure, support sustainable increase in public revenue and ensure that tax law provisions are consistent with the national tax policy objectives of the Federal Government of Nigeria.

This article intends to consider the implications of the Finance Act on companies involved in the provision of maritime services.

2. IMPLICATIONS OF THE FINANCE ACT ON THE MARITIME INDUSTRY
Companies involved in the provision of maritime services in Nigeria (depending on the whether the service is in the oil and gas sector) are usually liable to Companies Income Tax, Value Added Tax, Stamp Duties, Nigerian Content Development (NCD) levy, Cabotage surcharge and Withholding Tax. Of the tax laws amended by the Finance Act, the Companies Income Tax Act, the Value Added Tax Act and the Capital Gains Tax Act are three such laws with huge impact on companies involved in the maritime sector. The implications of these amendments on the companies and transactions in Nigerian Maritime Industry will be discussed below:

3. COMPANIES INCOME TAX
Taxation of companies in Nigeria is made pursuant to the provisions of the Companies Income Tax Act (CITA), LFN 2004. Companies Income Tax (CIT) is tax imposed on the profits of companies. For the purpose of taxation, CITA divides companies into two categories: Nigerian companies and non-Nigerian companies. While the term ‘company,’ is defined under CITA to mean any company or corporation (other than a corporation sole) established by or under any law in force in Nigeria or elsewhere, a Nigerian company is a company whose control and management of its activities are exercised in Nigeria pursuant to section 13 of CITA 2004 (as amended, 2007). The income of a company which has been registered under the laws of Nigeria to operate in the maritime sector is therefore subject to the provisions of CITA.

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