In a bid to stimulate investment and boost activities in the maritime industry, amid the downturn induced by COVID-19, the Federal Ministry of Transportation is seeking a package of tax incentives for the sector.
Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Bashir Jamoh, who recently conveyed the Ministry’s position to the Minister of Finance, Hajiya Zainab Ahmed, in Abuja, reiterated the commitment of the Minister of Transportation, Rotimi Amaechi towards ensuring the growth of the maritime in Nigeria. He said many governments around the globe had introduced massive tax reduction or elimination to spur activities in key sectors and rev up their economies during the coronavirus pandemic.
Jamoh said, “The maritime sector is critical in the growth and development of transportation and, by extension, international trade in the country. Thus, the need for Federal Government-oriented programmes and stimulus packages to deliver a response that catalyses a sustainable economic development cannot be overemphasised.”
The DG said the proposed incentives included zero import duty for brand new vessels imported by Nigerians or Nigerian shipping companies for use in foreign or domestic trade; 0.5 per cent only import duty for vessels aged between one and five years intended for use in foreign or domestic trade; and one per cent only import duty for vessels aged between five and eight years intended for use in foreign or domestic trade.
There was also a proposal for zero import duty for parts or components imported by Nigerian shipyards for local ship building, which will be for an initial period of four years after which it can be reviewed by government. All these are expected to give the sector the vibrancy it needs for growth.
Jamoh further said that the incentives were being proposed because of the importance of the Nigerian maritime sector to the entire sub-Saharan African region. He emphasised that Nigeria accounted for more than 65 per cent of the entire shipping trade of the sub-African continent. Nigeria is also the largest producer and exporter of oil and gas in the continent and Africa’s largest economy, he said.
It is worthy of note that the maritime sector is a crucial energizer of economic growth and development, as it facilitates trade between countries. The Nigerian economy has witnessed substantial growth in the last two decades owing to reforms that boosted private investment in the maritime industry.