The Federal Ministry of Transportation is proposing tax incentives for the maritime industry to stimulate investment and boost activities, amid downturn caused by COVID-19 pandemic.
The Director-General of the Nigerian Maritime Administration and Safety Agency (NIMASA), Dr Bashir Jamoh, disclosed this in a statement in Lagos on Wednesday.
Jamoh who conveyed the ministry’s position to the Minister of Finance, Hajiya Zainab Ahmed, reiterated the commitment of the Minister of Transportation, Mr Rotimi Amaechi, toward ensuring the growth of the maritime sector.
He noted that many governments around the globe had introduced massive tax reduction or elimination to spur activities in key sectors to reduce the impact of COVID-19.
“The maritime sector is critical in the growth and development of transportation and, by extension, international trade.
“Thus, the need for Federal Government-oriented programmes and stimulus packages to deliver a response that catalyses a sustainable economic development cannot be overemphasised,” Jamoh said.
He listed the proposed incentives as zero import duty for brand new vessels imported by Nigerians or Nigerian shipping companies for use in foreign or domestic trade.
Jamoh said that others were 0.5 per cent import duty for vessels aged between one year and five years intended for use in foreign or domestic trade, and one per cent import duty for vessels aged between five years and eight years intended for use in foreign or domestic trade.
He said that there was also a proposal for zero import duty for parts or components imported by Nigerian shipyards for local ship building.
He explained that it would be for an initial period of four years after which it could be reviewed by government.
“All these are expected to give the sector the vibrancy it needs for growth”, he said.
The NIMASA director-general said the incentives were being proposed because of the importance of the Nigerian maritime sector to the entire sub-Saharan African region.
According to him, Nigeria accounts for more than 65 per cent of the entire shipping trade of the sub-African continent as well as the largest producer and exporter of oil and gas on the continent.
“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 investments in the maritime industry,” he said. (NAN)