Fresh discovery has emerged on why Nigerian indigenous shippers have remained on the losing end amongst other high-end industries in Nigeria over the years.
Recently, the Executive Secretary of Nigerian Shippers Council (NSC), Barr. Hassan Bello has exposed the harsh conditions under which local shippers had been suffering, saying the absence of incentives for practitioners in the shipping sector of the economy has remained key factor in the underdevelopment of the industry.
Relying on the recently released 2018 Compendium of Investment Incentives in Nigeria by the Nigerian Investment Promotion Commission (NIPC), Bello averred that indigenous shipping sub-sector had for long, stood out painfully in the basket of incentives offered by the Central Bank of Nigeria (CBN), Ministry of Finance, and Federal Inland Revenue Service (FIRS) and other agencies of the government.
Business Hilights recalls that NIPC and the FIRS had in 2017, launched the Compendium of Investment Incentives in Nigeria which is a compilation of fiscal incentives in Nigerian tax laws and sector-wide fiscal concessions duly approved by the Federal Government and supported by legal instruments.
NSC boss while decrying the harsh tax conditions which local shippers’ had been subjected to over the years, listed the financial challenges facing the sector as absence of adequate tax relief period, lack of investment capital, absence of long term concessional funding, withholding tax on interest, dividends, dollar accounting and others.
He argued that “Uncertainties, lack of guarantees and assurances on investment had in the past resulted in the high debt profile of maritime industry in the financial sector of the economy.”
While stressing that Nigerian shipowners are faced with the challenge of the absence of an exemption from Customs duties, as well as benchmarking with other progressive maritime states, he listed some of the investment incentives in which shippers had been excluded from to include “Companies Income Tax incentive, which has been pegged at 30 per cent to encourage potential and existing investors as well as entrepreneurs. Another one is Pioneer Status, an industry incentive aimed at enabling the industry concerned to make a reasonable level of profit within its formative years”.
“Pioneer Status is a tax holiday granted to qualified or eligible industries anywhere in the federation for a period of three years (with addition alone more year or two years straight).
“Others are incentives in the solid minerals, petroleum and natural gas sectors; telecommunications, energy/electricity, tourism, transport; export; other lines of trade and special investment.
According to him, “In addition to these incentives, the CBN has also created an incentive for the agricultural sector, tagged Anchor Borrowers Programme, that provides funds at single-digit interest rates to mostly rice farmers and operators in the rice value chain”.
