NIMASA Vows to Appeal Court Order on NLNG Tax Holiday

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Dakuku Peterside

The Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Dr. Dakuku Peterside has expressed the agency’s dissatisfaction with the judgment of a Federal High Court Justice M. B. Idris in the case between NIMASA and the Nigeria Liquefied Natural Gas, (NLNG).

Dakuku who stated the management’s intention to appeal the judgment, noted that the agency’s legal team was waiting for the certified true copy of the judgment, which would be studied before making appropriate response.

NIMASA had in 2013 requested the NLNG to pay all statutory levies accruable to the agency, including the 3 per cent levy on gross freight on inbound and outbound international cargo, 2 per cent cabotage levy and sea protection levy, stating that the NLNG was not exempted from payments of statutory levies after its tax holiday ended many years ago.

Section 2 (1) of NIMASA Act 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”. The only vessels exempted from levies under the NIMASA Act are “…warships and military patrol ships”.

Head, Corporate Communications at NIMASA, Isichei Osamgbi, said in statement that NIMASA had portfolios of statutory revenues that it collects from shipping companies/ship operators, manning agents and seafarers. “This the agency pays into the coffers of the government. It is within these funds generated that the agency uses to develop and police the maritime sector. NIMASA does not receive any government allocations,” he said.
A Federal High Court sitting in Lagos on Tuesday ruled
that NLNG was not liable to make the said payments to NIMASA, and that all such payments already made by NLNG to NIMASA should be refunded to NLNG forthwith.

Justice Idris further held that NIMASA was wrong in blockading the Bonny Channel for the purpose of enforcing the payments against NLNG.

NLNG, had in 2013, sought a judicial determination on, among other things, the legality or otherwise of the levies sought to be imposed on NLNG by NIMASA, and the consequent blockade of the Bonny Channel by NIMASA and its agents as a result of the dispute.

NLNG had also sought a court order restraining NIMASA from further blockade of the Channel. An Interim Injunction granted in favour of NLNG by the Federal High Court was disobeyed by NIMASA,which again effected a blockade of the Bonny Channel for over a three week period whilst the matter was pending, thereby preventing NLNG vessels and other vessels doing business with the Company, from entry and exit through the Channel.

NIMASA had filed a Counterclaim restating its supposed entitlement to receive payment of the levies from NLNG.
Reacting to the court order, NLNG’s General Manager in charge of External Relations, Dr. Kudo Eresia-Eke said that the company as a law abiding company and a good corporate citizen remains committed to conducting its business in accordance with the laws of Nigeria.