Reps committee indicts oil firms for tax evasion

The House of Representatives investigating the Structure and Liability of NNPC’s Joint Venture (JV) Structure and Production Sharing Contract (PSC) has indicted several oil companies for alleged tax evasion to the tune of trillions of naira.

The committee also called for the impeachment and impeachment of the chairman of the Federal Inland Revenue Service (FIRS), Mamman Nami, for allegedly not doing enough to collect taxes from oil companies, a charge the FIRS boss dismissed as his agency. works hard to bring all tax evaders to book.

Responding to the commission’s allegations against his boss, the spokesperson of the FIRS chairman, Johannes Oluwatobi Wojuola, dismissed the claim as true, telling PREMIUM TIMES that the tax agency is investigating and prosecuting several tax defaulters.

According to a report obtained by the News Agency of Nigeria (NAN), the commission’s investigation lasted until 1991, involving billions of naira in alleged tax evasion.

The report is expected to be presented to lawmakers this week.

Investigation by the ad hoc committee, chaired by Abubakar Fulata, revealed that NNPC’s JVs and PSCs were selling Nigerian oil at the lowest cost to their subsidiaries in a “tax haven”.

The commission alleged that the company later sold the same oil to other buyers at full price, inflating the cost of production operations in Nigeria and understating the volume of oil they produced.

This, apart from the complete avoidance of Nigeria’s tax laws, the committee said is an abusive and ingenious tax avoidance scheme to minimize their tax liability.

The ad hoc committee implores the house to adopt the recommendations in a bid to bring sanity to the oil and gas operation in Nigeria.

This according to the report of the committee would be of greater benefit to the citizens.

The commission’s report also showed that all the international and state-owned oil companies that had capital allowance in Nigeria did not have a Certificate of Fixed Asset Approval (CAFA) as mandated by the Industrial Audit Act.

The report, however, said that all the oil companies that benefited from the capital allowance without getting the CAFA mandated by the Industrial Audit Act must return all the money to the government treasury.

NAN reports that on November 1, 2022, the House ad hoc committee investigating the structure and accountability of the Nigerian National Petroleum Limited’s Joint Venture (JV) Businesses and Production Sharing Contracts (PSCS) began investigating the oil company for alleged tax evasion.

The investigation was in the background of alleged tax fraud by some oil companies operating in Nigeria, which led to the formation of the committee by the spokesperson, Femi Gbajabiamila.

Mr. Fulata, in a meeting with stakeholders in the oil and gas industry, referred to important sections of the 1999 Constitution as amended.

“This commission is based on section 88 and 89 of the Constitution of the Federal Republic of Nigeria 1999, as amended, and we are calling on the heads of agencies that have not sent submissions to do so.

“This commission cannot fail in its mandate and we could resort to the use of the Police and other security agencies to compel the agency heads to do so.”

Mr. Fulata decried that tax evasion by oil companies, especially the International Oil Companies (IOC) has negatively affected the country’s revenue.

Mr. Fulata has expressed disappointment that several letters of invitation sent to some organizations have not been responded to, revealing that those who responded did wrong.

As reported by NAN, on November 16, 2022, the house committee summoned the president of FIRS.

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FIRS representatives, the director and special assistant, were not allowed to make presentations by committee members, who insisted that they expect only the president to speak on behalf of the agency.

FIRS representatives earlier told the commission that the service does not have access to the crude oil Stock Certificate that is being withdrawn.

According to the representatives, the tax agency relies only on the invoices made and presented by the oil companies. The committee then considered the arrangement ridiculous.

(IN)