The Senate through its committee on Finance has directed the Nigerian Upstream Petroleum Regulatory Commission (NUPRC ) to stop all defaulting International Oil Companies (IOCs) from lifting crude oil with their tankers from Nigeria until they pay requisite tax to the Federal Inland Revenue Service (FIRS) .
The directive was given Tuesday by the Chairman of the Committee, Senator Solomon Olamilekan Adeola (APC Lagos West), when the Chief Executive of NUPRC, formerly Department of Petroleum Resources (DPR), Engr. Gbenga Komolafe, appeared before the panel on issues concerning revenue losses in the maritime sector.
He explained that the directive would help in recovering and increasing revenues to bridge the national recurrent budget deficits.
He said, “from the preliminary findings of the committee, there is need for serious back duty investigations of all foreign companies whose oil tankers are lifting Nigeria crude oil in relation to their compliance with tax obligations according to extant laws of the land.
“The committee is directing your commission to stop all companies lifting crude oil from Nigeria until they show evidence of tax payment as they are mandated by law to pay.
“Alternatively, the companies can do a payment on account based on estimates to continue to lift Nigeria crude oil pending a time when proper reconciliation will be done on their tax liabilities in the last ten years of operation”.
The chairman disclosed that in 2020, an audit of just one of such foreign companies known as TeeKay Group with 14 tankers paid about $10 million in tax liabilities to FIRS for a back duty investigation of five years, adding that at least over 100 of such entities have been lifting crude oil in Nigeria without paying a dime in taxes.
“Henceforth, NUPRC, unlike the way the defunct DPR operated must ensure that any firm lifting crude oil must have a tax clearance from FIRS.
“We are going to investigate about 100 companies lifting our crude oil without paying any taxes as there are no record of such payment with FIRS. We must recover all our revenue from this source,” the chairman reiterated.
According to him, “the committee is not ruling out the existence of a cartel that may be behind this huge tax evasion in dollars,” stressing the need for collaboration and synergy between maritime agencies like Nigeria Ports Authority, NPA; Nigerian Maritime and Safety Agency, NIMASA; Nigeria Navy, NUPRC, NNPC and FIRS on the issue of tax revenue from the maritime sector.
Earlier, Komolafe explained the process for giving clearance for ships to lift Nigerian crude oil adding that as a new agency, they are still in the process of unbundling from the old DPR.