SERAP urges Nigerian Govt to recover unpaid taxes from Int’l oil firms

The Socio-Economic Rights and Accountability Project (SERAP) has called on the federal government to “move swiftly” in recovering unpaid taxes by some evading companies in the Oil & Gas sector between 2005 and 2015.

SERAP made the call in a report titled “Impact of non-payment of Capital Gains Tax (CGT) and other Levies in the Oil and Gas Sector on the Socio-Economic Development of the country” launched on Tuesday in Lagos.

SERAP maintained that the divestment of assets by international oil companies has not translated into commensurate increase in revenue remitted to the federal government’s coffers from taxes.

According to the report, over $8 billion oil and gas assets were sold to Nigerian entities, particularly onshore fields during the period, even as the companies failed to pay Capital Gains Tax (CGT) on the assets.

The report, citing certain information obtained from the Federal Inland Revenue Service (FIRS), claimed that the administration of late Umaru Musa Yar’Adua failed to collect CGT on the sale of Addax Petroleum to Sinopec in 2009 from divestment of assets worth $2.5 billion.

It stated further that the Goodluck Jonathan government also failed to collect tax on the transfer of Conoco Phillip Oil Company Nigeria Limited to Oando Hydrocarbon – now Oando Oil Limited – through the acquisition of the shares of Conoco Phillips in Canada for $1.79 billion.

“The shares were acquired by Oando Energy Resources Canada,” it said.

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SERAP said the report is to call the authorities involved to urgently “recover any possible past-unpaid dues, and for improvement in the collection and estimation of capital gains tax in the Nigerian oil sector.”

“The political will to improve framework and policies for the determination and payment of capital gains tax in the oil sector could generate much needed revenue for execution of government projects and provision of infrastructure and socio-economic development.

“As such, an improved framework has the potential to galvanise action to reduce poverty, underdevelopment, unemployment, and inequality,” the report read further.

Speaking at the launch, a lawyer and human rights activist, Femi Falana, who cited the report, said $270 million was yet to be recovered by the federal government.

“The amount recoverable has not been captured due to the refusal of Department of Petroleum Resources (DPR) and the Nigerian Extractive Industries Transparency Initiative (NEITI) to provide requested information on the oil companies that have divested interests in the oil and gas sector,” he said

Falana urged SERAP to compel the two agencies to supply the information so as to update the report.

“SERAP and the progressive extraction of the civil society must take special interest in the judgment of the Supreme Court which has ordered the federal government to recover 18-year lost revenue from oil giants under the Deep shore Offshore Inland Production Contract Act,” the lawyer added.

 

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