Failure of companies to pay tax fuelling poverty in Nigeria--- SERAP - Trends and Politics


Tuesday, 30 October 2018

Failure of companies to pay tax fuelling poverty in Nigeria--- SERAP

                                                               Former President Jonathan
A new report by the Socio-Economic Rights and Accountability Project (SERAP) has revealed how over US$8 billion oil and gas assets were sold to Nigerian entities – especially onshore fields –between 2005 and 2015, and how the failure of companies to pay Capital Gains Tax (CGT) on the sale of the assets is fuelling poverty, underdevelopment and inequality in Nigeria.
The report also revealed that the divestment of assets by international oil companies has not translated into commensurate increase in revenue arriving in the Nigerian Government's coffers from taxes.
According to information obtained from the Federal Inland Revenue Service (FIRS) for the report, the governments of Umaru Musa Yar'Adua and Goodluck Jonathan failed to collect CGT on the sale of Addax Petroleum to Sinopec in 2009 from divestment of assets worth $2.5 billion.
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 US$1.79 billion. The shares were acquired by Oando Energy Resources Canada.
The report is calling on the authorities 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 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 today at the CITIHEIGHT Hotel, Lagos states, “In recent years, economic inequality has soared to unprecedented levels in Nigeria, hampering poverty reduction efforts, fuelling political instability and presenting new threats to the full spectrum of human rights.”
The report also states that, “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 presented to the media by presented by Mr. Azeez Alatoye and Mrs.Bimpe Balogun urges “the Federal Government to move swiftly to improve the administration of capital gains tax in the oil and gas sector and to identify the loss over a period of time.”
Mr Femi Falana SAN, said at the report launch: “SERAP deserves commendation for the public presentation of this timely report. From the report not less than $270 million has not been recovered by the federal government, the amount recoverable has not been captured due to the refusal of DPR and NEITI to provided requested information on the oil companies that have divested interests in the oil and gas sector. SERAP should proceed to compel the two agencies to supply the information so as to update the report.”
Falana also said, “Just yesterday, the NEITI disclosed that the NNPC and others have withheld the sum of $22.06bn and N481bn from the federation account. SERAP should collaborate with NEITI to collect the huge fund without any further delay. 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 Deepshore Offshore Inland Production Contract Act.”
According to Falana, “The minister of state in the ministry of petroleum resources, Dr. Ibe Kachukwu last year revealed that the amount not recovered was $60bn due to the non-implementation of the law. NIMASA, another agency of the government, has established that oil stolen and discharged in one port in the United States in 3 years has been valued at $12.7bn. So, if the said sum of over $94bn is paid into the federation account Nigeria does not have to go to China begging for loans for infrastructural development.
The report calls for massive advocacy and campaign “to force recovery of unpaid capital gains tax over the past 10 years from those who have not accounted for such after disposal of their interest in oil and gas assets.”
The report launch chaired by journalist Richard Akinnola was attended by Dr. Khadija Bellow-Kumo, Deputy Director Oil and Gas Department RAMFAC; Mrs Bimpe Balogun- Immediate past Chairperson of Nigerian Taxation Standard Board; Mr. AbdulMumin Abubakar, Unit Head Monitoring & Evaluation NEITI; and Mr Babatunde Sulaimon, Economic and Financial Crimes Commission (EFCC).
All the participants promised to work to ensure the full implementation of the recommendations contained in the report.
Others at the events are: Mr. Akaa AU the Independent Corrupt Practices and other Related Offences Commission (ICPC), Abuja; Mr. Oladele Timothy, ICPC Lagos; Mr. Japhet Udeani, ICPC Lagos; Mr. Adebayo Sunday, ICPC Lagos; members of the civil society, academic community, and the media.

No comments:

Post a Comment