Singapore shipping firm Pacific International Lines (PIL) has left a trade agreement with the Nigerian Federal government due to unfavourable duty and tonnage laws, according to Nigeria media New Telegraph Online.
The Federal Government entered into a Memorandum of Understanding (MoU) with PIL about two years ago to help Nigeria form a national carrier with stake holding of 60 to 40% between PIL and Nigerian ship owners respectively.
However, the deal did not pull through due to unfavourable Nigerian fiscal policies, tax laws, tonnage tax laws and more; while other countries declare zero duty on imported ships, an average import duty charged in Nigeria for an imported vessel is 14% of its value.
The President of Shipowners Association of Nigeria (SOAN) Engr. Greg Ogbeifun, who was a member of the ministerial committee set up to facilitate the joint venture between PIL and Nigeria, was unhappy with the chance of a Nigerian flagged national fleet gone.
“I am a member of the ministerial committee, I can tell you that PIL pulled out of the deal because the Nigerian fiscal policies do not make establishment of a fleet of that nature possible where they would be involved competition in global trade,” he said.
“Our fiscal policies, tax laws, tonnage tax laws and other laws affect international shipping.
“If you take a Panamax crude tanker of $40 million, you would have to pay another 14% duty in order to import the vessel into the country despite flying Nigerian flag.”
The import tax was the reason why Nigerian shipping firms could not compete internationally as it made the cost of carrying cargo by foreign liners cheaper than shipping companies in Nigeria, says Ogbeifun.
Published: 23 May, 2018
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