Gabon’s government has told French oil major Total’s local subsidiary to pay $805 million in taxes it owes for 2008 to 2010. The country is restructuring its vital energy sector as it tries to double output to 500,000 barrels per day.
Total Gabon said it would challenge the tax demand, which follows a state audit of the country’s petroleum indus¬try that began in 2010. The company said it “considers this tax adjustment unfounded” and was confident that discussions with the government would have a favourable outcome.
An earlier tax dispute with Addax Petroleum, a subsidiary of China’s Sinopec, led that company to pay the government at least $400 million. Other companies will be subject to similar tax audits.Total is the oldest foreign petro¬leum company in Gabon and owns 58.28 percent of Total Gabon, with the Gabonese government holding 25 percent. Analysts believe that the gov¬ernment’s holding in the firm would help speed a resolution to the dispute even though the government had said Total’s rejection of its tax demand was proof of bad faith.
Joel Ogouma, Gabon’s director general of taxes in a statement said that “the administration deplores (Total’s) attitude, characterized by a tendency to pay attention only to one’s point of view”. He added that Gabonese authorities regret the bad faith of Total Gabon which, despite its size, remains a taxpayer like any other, subject to the laws and regulations of the country.