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Oil swap scam: FIRS to conduct comprehensive audit of NNPC, Aieto, others

FIRS to boost tax revenue through waiver

The Federal Inland Revenue Service (FIRS) on Wednesday unveiled plans to conduct a comprehensive audit of the accounts of Nigerian National Petroleum Corporation (NNPC) and its subsidiaries.

The exercise which is expected to commence before the end of February 2016 is geared towards uncovering the actual amount accruable to the Federation Account as provided by relevant extant laws.

Ajayi Bamidele, FIRS’ Coordinating Director (Domestic Taxes Group) who gave the information at the resumed hearing of the House of Representatives Committee on Oil Swap, on Wednesday, requested for details of all contracts signed between NNPC/PPMC and Duke Oil Global Service Limited.

Responding to questions from the Adhoc committee, Abdulkadir Seidu, Duke Oil’s Managing Director alleged that there are several companies involved in the crude oil lifting which are not paying taxes to Nigeria.

Seidu also confirmed that the NNPC benefits from the commission of 8 cent on crude oil per barrel and $5 per metric ton on imported refined products, payable to Duke Oil by the three crude oil trading companies.

According to him, the sum of $39,362,398.76 had so far been paid to the coffers of the company between 2010 and 2012, leaving the balance of $41,652,084.10.

In a bid to recover the sum of $41,652,084.10 unpaid outstanding debts since 2012 by the three trading companies engaged in the oil swap, Seidu disclosed that efforts by Economic and Financial Crimes Commission (EFCC) and Department of Security Services (DSS) proved abortive.

Members of the Ad-hoc committee chaired by Mohammed Zakari (APC-Kwara) had expressed concerns over alleged tax evasion by some of the companies involved in crude oil lifting in the country.

The Committee also demanded for thorough verification of  names and location of all companies registered in the name of Duke oil.

The lawmakers accused Duke Oil of being ‘evasive’ and ‘distracting’ the committee, for failing to provide relevant documents that would aid the findings of FIRS on various taxes unpaid between 2010 and 2014.

They also demanded for the authorisation given to PPPRA on the non-collection of relevant taxes on petroleum products, since 2003.

While expressing concern over the insistence of Trafigura (non-resident) which participated in the crude oil lifting and exchange for refined products, the lawmakers urged FIRS and Petroleum Products Marketing Company (PPMC) to ascertain the actual products and amount to be paid to the Federation Account.

They also mandated PPMC and FIRS to ascertain the volume of transactions involving Duke Oil Incorporated, which registered in Panama in 1989 and got $39 million revenue from oil transactions in Nigeria.

While frowning at various breaches of the agreements signed by the parties including long delays in delivering refined products, the lawmakers chided NNPC and its subsidiaries for failing in their statutory responsibilities and lack of synergy between relevant regulatory agencies.

FIRS Coordinating Director (Domestic Taxes group), Babatunde Ajayi said a trading firm involved in the NNPC oil swap arrangement, Trafigura Nigeria Ltd has not filed any tax returns with the agency despite engaging in oil transactions in Nigeria.

Ajayi however disputed such claims saying any company operating in the country and engaging in transactions must pay relevant taxes, irrespective of where it was registered.

“From all the information gathered here today, income, that is the commission, was derived from Nigeria, so it is taxable,” Bamidele said.

The Committee also mandated the Petroleum Product Marketing Company (PPMC) to furnish it with formal directives on lifting of crude oil by the trading firms, especially Aiteo Nigeria Ltd before agreements were consummated.

In his presentation, Michel Uchegbulam, Aiteos’ Managing Director, who admitted the $17.9 million out of which the sum of $8.2 million has been paid, argued that the lifting was done in good faith.