NIMASA vows to appeal judgment on NLNG tax holiday suit
DG NIMASA, Dr. Dakuku Peterside
The Nigerian Maritime Administration and Safety Agency NIMASA, has vowed to appeal against the judgment delivered by a Federal High Court sitting in Lagos on a tax holiday suit brought against the agency by the Nigeria Liquefied Natural Gas NLNG.
Justice M. B. Idris, the presiding justice of the court had in the judgment delivered yesterday upheld the NLNG’s prayer that the company enjoys a tax holiday and therefore not liable to pay all statutory Levies accruable to the agency, which comprise the three per cent levy on gross freight on inbound and outbound international cargo, two per cent Coastal and Inland Shipping Cabotage Levy and Sea Protection levy, which are partly paid into Federal Government coffers and also constitutes a major source of funding of the agency.
Director General of the agency, Dr Dakuku Peterside, who spoke shortly after the judgment, said that the agency is dissatisfied with the judgment of the Federal High Court.
“Consequently, the management intends to appeal the judgment. To this effect, NIMASA’s legal team is currently studying the judgment as well as preparing necessary documents while also waiting for the certified true copy of the judgment with a view to responding appropriately”, the DG said emphatically.
Trouble started in 2013 when NIMASA requested the NLNG to pay all statutory Levies accruable to the agency such as the three per cent levy on gross freight on inbound and outbound international cargo, two per cent Cabotage levy imposed on all vessels within the nation’s inland and coast region and the Sea Protection Levy.
The agency in seeking to enforce the payment of these statutory levies, insisted that that the NLNG was not exempted from payments of statutory levies after its tax holiday ended many years ago, arguing that it would not enjoy tax holiday in perpetuity a development that made the NLNG to approach the court.
The honourable Court had however in 2013 ruled on an agreement by both parties which stipulated that NLNG would pay outstanding levies and also to continue to pay all applicable levies in line with the NIMASA mandate.
The agency in insisting that the payments must be made, relied on section 2 (1) of NIMASA Act 2017, which states that “This Act shall apply to ships, small ships and crafts registered in Nigeria and extended to ships, small ships and crafts flying a foreign flag in the Exclusive Economic Zone, Territorial and Inland Seas, Inland Waterways and in the Ports of the Federal Republic of Nigeria”.
It also argued that the only vessels exempted from levies under the NIMASA Act are “warships and military patrol ships”, (Section 2 (2), as NIMASA has portfolios of statutory revenues that it collects from shipping companies/ship operators, manning agents and seafarers, which the agency pays into the coffers of the government.
The DG also argued that It is from these funds generated that the agency develops and police the maritime industry, since it does not receive any allocation or subventions from the Federal Government..