Tax evasion : Senate orders stoppage of foreign tankers from lifting crude oil  

By Adekunle Adesuji

The Senate Committee on Finance in  has ordered  the Nigerian Upstream Petroleum Regulatory Commission, (NUPRC) to stop all foreign companies lifting crude oil with their tankers from Nigeria without paying any tax until they pay requisite tax to the Federal Inland Revenue Service(FIRS).

 

The Senate gave the directive when Engr. Gbenga Komolafe, the Commission Chief Executive of NUPRC, the successor of Department of Petroleum Resources(DPR) under Petroleum Industry Act(PIA) before the lawmakers during  an interactive session with the senate committee on revenue losses in the maritime sector.

 

In a statement issued by media Adviser , Kayode Odunaro , the Chairman of the Committee, Senator  Solomon Adeola  stated that 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” Senator Adeola stated.

 

The chairman of the committee disclosed that only recently in 2020, an audit of just one of such foreign companies known as TeeKay Group with 14 tankers paid about $10 million dollars 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” senator Adeola reiterated.

 

Senator Adeola stated that the committee is not ruling out the existence of a cartel that may be behind this huge tax evasion in dollars stressing that at this point there should be 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.

 

Engr. Komolafe had earlier 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. He promised to supply the hard copy of a list of companies lifting crude oil that he brought in soft copy alone.

 

Also,  Senate on Tuesday extended the implementation year of the 2021 Appropriation Act from 31st March to 31st May, 2022.

 

 

The decision of the Senate was sequel to  consideration of a bill to Amend the 2021 Appropriation Act.

 

Before the Lawmakers embarked on considering of the bill, the Senate  suspended Rule 78(1) of the Senate Standing Orders 2022 (as amended), to enable the upper chamber to expeditiously introduce and pass the bill.

 

The bill was read on Tuesday for this first, second and third time after the suspension of Rule 78(1) by the Senate Leader, Senator Yayah Abdullahi (Kebbi North).

 

Leading debate on the bill, Senator Abdullahi, recalled that prior Appropriation Acts in the past were passed mid-year, with their implementation usually extended to the following year.

 

The lawmaker, noted that in previous Appropriation Acts, these extensions were usually covered by a Clause, in line with the provisions of Section 318 of the Constitution of the Federal Republic of Nigeria, that the Act runs for a period of 12 months, starting from the date it comes into effect.

 

He, however, observed on the contrary that Clause 12 of the provisions of Section 318 of the Constitution provides that the 12 month period starts from the 1st day of January to 31st day of December, 2021.

 

He recalled that the 2022 Appropriation Act was amended to extend the implementation year from 31st December, 2021 to 31st March, 2022.

 

Senator Abdullahi, explained that the extension of the budget period became imperative in view of the need to complete ongoing projects nearing completion.

 

He said, “As you are aware, the 2021 Virement of the aggregate sum of N276 billion was approved for several MDAs by the National Assembly in December, 2021 along with 100 percent release of the 2021 Capital Budget of the MDAs.

 

“A significant portion of the releases to the MDAs has been utilized following the extension to 31st March, 2022.

 

“In view of the critical importance of some key projects nearing completion, it is expedient to grant further extension of the expiration clause to avoid compounding the problem of abandoned projects given that some of the projects were not provided for in the 2022 budget hence the need to extend the implementation year form 31 March, 2022 to 31st May, 2022.”

 

The bill to amend the 2021 Appropriation Act was, thereafter, passed sequel to its consideration by the Committee on Supply.