Customs decries absence of incentives for shipping sector
The Nigerian Shippers Council has decried the absence of incentives for practitioners in the shipping sector of the economy.
The Executive Secretary, NSC, Hassan Bello, described the development as neglect, saying that it stood out painfully in the basket of incentives offered by the Central Bank of Nigeria, Ministry of Finance, and Federal Inland Revenue Service, which was published in the 2018 Compendium of Investment Incentives in Nigeria by the Nigerian Investment Promotion Commission.
The NIPC and the Federal Inland Revenue Service launched the Compendium of Investment Incentives in Nigeria in 2017.
The compendium 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.
The investment incentives 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.
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.
Hassan noted that the maritime sector was bedevilled by several constraints mainly due to the financial crisis facing shipowners and maritime operators.
He said in spite of the fact that the industry was endowed with enormous possibilities that were waiting to be maximised, the difficulty in accessing funds by indigenous shipping business owners had posed a huge threat to the sector.
He 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.
“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,” he said.
He noted that shipowners also faced the challenge of the absence of an exemption from Customs duties, as well as benchmarking with other progressive maritime states.
The Director-General, Nigerian Maritime Administration and Safety Agency, Dr Dakuku Peterside, while addressing the huge financial gap in the shipping sector, had maintained that the Cabotage Vessel Financing Fund was not sufficient to cater to the needs of operators in the sector.
He said that the agency was working with the Nigerian Content Development and Monitoring Board and the CBN to get a special facility to fund the acquisition of assets.