Bloomberg: Oil Tankers Avoid Nigeria over Nine-year Multimillion-dollar Tax Claims

Emmanuel Addeh in Abuja

At least two oil tanker owners are staying away from Nigeria after several companies received backdated tax bills totalling millions of dollars, a Bloomberg report said yesterday.

Multiple businesses received demands from Nigeria’s Federal Inland Revenue Service (FIRS), according to a member notice by industry group Intertanko seen by Bloomberg.

They cover the period from 2010 to 2019 and range in amount from $400,000 to $1.1 million per vessel. In aggregate, some claims reach tens of millions of dollars, the report stated.

As a result, at least two ship-owners, who asked not to be identified discussing commercial matters, are steering clear of Nigerian ports to avoid the risk of having their ships arrested.

Tanker earnings from West Africa to Europe have soared more than 42 per cent in three days so far this week, according to Baltic Exchange data, according to the report.

Ships staying away from Nigeria makes it easier for those owners still willing to go there to get higher rates for their vessels.

Many of the tax bills referred to a previous law published by Nigeria’s revenue service in July 2021. That measure says any vessel carrying crude oil, gas or refined fuels from Nigeria is liable to pay tax there, it said.

Intertanko couldn’t immediately comment and Nigeria’s FIRS didn’t respond to multiple requests for comment, Bloomberg said.

Recall that on June 3, 2021, FIRS released a circular that there should be taxation of foreign ships or vessels lifting crude oil from Nigerian territorial waters.

“One of the common features of the oil industry in Nigeria is that crude oil is often sold to foreign buyers.

“Free on Board (FoB) origin means that the foreign or non-resident buyers are responsible for the arrangement and payment for vessels for the transportation of the crude oil from Nigeria.

“Usually, the shipping companies contracted for the transportation of the crude are non-residents, and payments to them are made by the non-resident buyers of the crude oil.

“Consequently, any vessel that carries crude oil, gas, petroleum products or any other item from Nigeria is liable to tax in Nigeria, irrespective of where or with whom the carriage contract was executed,”  the circular said at the time.