Maritime stakeholders in the country warn that seafarers in Nigeria would be soon gone if no legislation action is taken
Imagine if you have two job offers before you. Both pay the same wage of $1,000, but for one company, there will be a mandatory automated tax deduction of 30%. This means, $300 is deducted from your salary each month and you end up with $700 to take home and support your family.
This analogy was described by Nigerian Liquified Natural Gas (NLNG) Ship Management Limited (NSML) Fleet Manager Captain Hambali Yusuf. He was highlighting the precarious situation the Nigerian maritime industry is facing. Due to Nigerian laws, companies are required to deduct from employees’ salary a Company Income Tax (CIT) and pensions, and this regulation is endangering the growth of the maritime industry in the country.
Consequences are dire as country loses seafarers
The global maritime industry is facing a seafarer shortage crisis already. To make up for the losses, maritime companies have been searching high and low for qualified and competent seafarers from all corners of the world. Based on the United Nations Conference on Trade and Development statistics, there was an estimated 25,610 Nigerian seafarers recorded in 2020. This makes up about 1.6% of seafarers supply on a global scale.
According to NSML’s Human Resources Manger Henry Agbodjan, trained seafarers have gained recognition with foreign employers and the tax-free benefits are luring senior qualified Nigerian seafarers to these foreign companies, “We train these officers, they grow up to a certain level, and then they start getting attention from abroad. As soon as they get there, they can even get another $1,000 a month job, which doesn’t require any tax or pension deduction. So they are off.”
This does not bode well for the Nigerian economy or the Nigerian maritime industry. Captain Hambali predicted that, within Nigeria, should maritime businesses not raise their workers’ wages to curb the tax deductions, more seafarers will be lost, “It is only Nigerian seafarers that pay taxes in the whole world. In India, if you are not in the country for seven months, you won’t pay any tax. But in Nigeria, if you are not around for a whole year, you are still going to pay tax.”
On hindsight, raising the wages of Nigerian seafarers does not solve the root cause. Because raising wages would just increase the cost of maritime companies in Nigeria, which could result in companies hiring less seafarers for a heavier job responsibility. This would ultimately put a strain on the Nigerian economy.
What is scarier, is that should well-trained Nigerian seafarers continue to leave for better offers and there are no seasoned seafarers left to pass on their skills. There may come a time where the Nigerian maritime industry cannot sustain itself and train new seafarers to help supply for international service.
Crewing Online Media Team
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