FG plans zero duty on brand new ship imports…Adopts graduated duty regime
The Federal Government is putting finishing touches to plans for the introduction of zero import duty for all commercial vessels imported into the country as part of efforts to grow indigenous fleet and curb current foreign domination in the country’s shipping industry.
The government is also tinkering with the idea of introducing a graduated import duty regime for all categories of vessels imported into the country whereby newer vessels would attract lower import duty while older ones would attract higher duty payment.
Recall that the Nigeria Customs Service last year dismissed calls on it by indigenous ship owners to waive duty on the importation of some categories of ships, especially commercial vessels like in the aviation industry where commercial airplanes attract zero duty, insisting that the service is only a policy- implementing agency and therefore cannot determine what is paid on any item of import.
The Director General of the Nigerian Maritime Administration and Safety Agency NIMASA, Dr Bashir Jamoh, who made this disclosure in a recent chat with newsmen in Lagos, said that President Buhari would soon approve a zero import duty regime for brand new vessels imported by indigenous shipping lines as proposed by the agency.
He also disclosed that NIMASA is liaising with the Federal Ministry of Finance, which is currently working on the details of the graduated duty regime as well as the zero duty payment, which would soon be presented to President Muhammadu Buhari for approval.
The DG also hinted that the agency is also working with the Central Bank of Nigeria CBN, with a view to introducing some monetary incentives for the indigenous ship owners to enhance their ability to acquire vessels that could compete with their foreign counterparts, who have perpetually dominated the industry.
In what appeared a one-year scorecard of the management under his watch, the DG noted that on assumption of duty, the management came up with the triple S (SSS) strategy comprising safety, security and shipping development, which are also core mandates of the agency.
He noted that with the successful deployment of security assets under the country’s Integrated National Security and Waterways Protection Infrastructure, also called the Deep Blue Project, there has been a drastic reduction of piracy and other forms in crimes not only within Nigeria’s Exclusive Economic Zone EEZ but also across the entire Gulf of Guinea region.
The DG expressed the hope that with the approval of the zero duty on brand new vessels, coupled with the expected disbursement of the N136.5billion comprising N32billion and $209million for the Cabotage Vessel Financing Fund CVFF, many indigenous shipping firms would be able to acquire vessels and grow the indigenous fleet.
It would be recalled that most Nigerian-owned shipping lines have been clamouring for the cancellation of the Temporary Importation permit exclusively enjoyed by foreign shipping lines, which allows them to import band new vessels without payment of duty, which many of them had abused.
It was gathered that few months after the importation of such new vessels, the owners would take them back, rename them and bring them as brand new under the TI permit, a development that necessitated threats by NIMASA and Customs to cancel the TI regime, through which the country loses hundreds of billions in import duty revenue.
It was further gathered that when the zero duty for brand new ships is approved, other crafts including yachts, which are classified as luxury goods would be excluded just like the aviation where private airplanes and jets are exempted from the zero duty payment.