Underpaid Petroleum tax: IOCs have been shortchanging Nigeria – Rep Committee reveals

Oredola Adeola

The International Oil Companies operating in Nigeria have been shortchanging the country for many years, by underpaying taxes estimated to billions of dollars, and making capital allowances claims without the Certificate of Acceptance of Fixed Assets (CAFA).

This was the revelation made by the Nigerian House of Representatives Committee investigating the Structure and Accountability of the Joint Venture (JV) Business and Production Sharing Contracts (PSCs) at the Wednesday resumed investigative public hearing, probing the remittances of Shell Petroleum Development Company of Nigeria, Total Energies and First E and P others.

Hon. Abubakar Fulata, Chairman of the Committee, in his remark disclosed that most of the accused IOCs may be compelled to make necessary refunds to the government coffers, having made claims of capital allowance from the government without presenting CAFA certificate.

The Committee Chairman particularly mentioned Shell, Chevron, Agip, Total, First Exploration Petroleum Development Company Limited, and Eroton Exploration, and Production Company Limited.

Other companies invited by the Committee are Ten Oil Petroleum and Energy Limited, Staoil Nigeria Limited, Belema Oil Producing Limited, Emo Exploration and Production Limited, and Sterling Oil Exploration and Production.

Hon. Fulata revealed that the taxes paid by the oil companies were not sufficient, adding that FIRS does not rely on the Stock Certificate of Crude Oil and Certificate of Acceptance of Fixed Assets.

According to him, CAFA certificate was the basis for capital allowances claims, while Stock Certificates gave clearer pictures of the volume of crude oil lifted by the oil companies.

He said, “Shell, Total, and First E & P were in violation of Nigerian law for making capital allowances claims without the CAFA certificate”.

The Committee Chairman however disclosed that the oil companies are not only bound by the petroleum profit tax act but do not have the constitutional right to select which laws to obey and disregard.

The committee said it was not only the PT Act they were bound to obey, adding that they had no power to select which law to obey and which one not to obey.

They however insisted that the oil companies, among other things, must present a stock certificate, capital allowance enjoyed, and contributions to NNPC-JV and PSCs Account.

Mr. Bashir Bello, team lead of the Shell delegation, informed the Committee that SPDC had been in operation since 1929 and promised to furnish the committee with the relevant documents being requested with exception of the CAFA certificate.

Other companies indicted by the Committee in their separate submissions and presentations revealed that they have been relying on Petroleum Tax Act to make capital allowance claims.

They further claimed that the CAFA was domiciled with the Ministry of Industry.

Leave a Reply

Your email address will not be published. Required fields are marked *