Aviation, shipping in focus as FIRS, Pedabo, tackle accounting, taxation challenges

Aviation and shipping were top focus as industry players, led by Federal Inland Revenue (FIRS) and Pedabo Professional Services expressed concerns over the impacts of multiplicity of charges, levies, and taxes in the sectors, stressing that there was need to address the situation for the sectors to grow.

They explained that unless the federal government and other stakeholders address challenges bedevilling the nation’s maritime and aviation sectors, projected benefits may remain elusive.

The experts insisted that adopting the same presumptive tax rate of six percent as in other industries may be counter-productive in the shipping and aviation sectors, adding that consolidation of accounting mechanisms as well as a single revenue authority remain sacrosanct for the country.

Speaking during a Thought Leadership Session for aviation and shipping sectors led by FIRS and Pedabo Professional Services, Muhammad Nami, the executive chairman of FIRS, on the other hand, asked the Federal Government to block leakages in the accounting and revenue segments of the economy through consolidated accounting mechanism and a single revenue authority.

Existing gaps, according to them, provide run for leakages and limit revenue and accounting potentials.

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Nami said there was a need to consolidate or aggregate the country’s accounting mechanism to ensure taxes paid are accounted for by a single revenue authority in the country.

To him, the development would ensure that taxes collected on behalf of the government are remitted to fund budgetary allocations, social amenities as well as critical infrastructure.

Ajibade Fashina, managing partner, Pedabo, had similarly stated that the shipping and aviation sector can leapfrog contribution to Gross Domestic Product (GDP).

Speaking on blocking the leakages in the country’s tax system to boost remittances, he said the law is certain and is being improved regularly.

“The Finance Act that is being reviewed on a yearly basis. They (FIRS) identify the leakages and loopholes, and they are blocking those loopholes, and that is what should be done.

“Maybe the government needs to think more about what the money is being used for. Who is collecting what? Why are so many of those funds, which more or less, form part of the revenue not going into the national purse? I think those are issues that need to be addressed,” Fashina added.

With disputes on shipping and airline taxation between the Federal Government and some operators, a Partner at Pedabo, Killian Khanoba, stated that “Nigeria is not alone in the practice of exerting tax on container leasing and ancillary revenues. The dispute with the international lines on the matter is also not isolated to Nigeria.”

With over 16 agencies in the airports and sea in the country, Khanoba noted that shipping and aviation must not be treated with levity to attract flow of capital, goods and services.

He said: “Aviation and shipping sectors in Nigeria are characterised by multiplicity of charges, levies and taxes payable by operators. This must be addressed for the sector to grow. The Nigerian tax regime for the sectors obviously needs a makeover, to guarantee growth.”

Albert Folorunsho, managing consultant at Pedabo, noted that the Federal government needs to include in extant regulations issues related to taxation for shipping companies operating within or around the country to simplify collection.