The House of Reps alleged that international oil companies could evade taxes

Why 65 agencies have never been audited, yet still funded by FG – Reps Committee

The Nigerian House of Representatives has said that International Oil Companies operating in Nigeria can evade taxes by making capital allowance claims without the Certificate of Acceptance of Fixed Assets (CAFA).

This is exposed during the plenary session on Wednesday while the committee investigating the Structure and Accountability of the Joint Venture (JV) Business and Production Sharing Contracts (PSCs) examined the Shell Petroleum Development Company of Nigeria, Total Energies and First E and P.

They note that the CAFA certificate marks the basis for claiming capital allowances.

Not enough: The Committee, led by Rep. Abubakar Fulata, revealed that the taxes paid by the FIRS to the IOCs are not enough, because the FIRS does not rely on the Stock Certificate of Crude Oil and Certificate of Acceptance of fixed Assets, he said.

Reo Fulata also added that the Stock Certificates provide clearer pictures of the oil removed while the CAFA certificate is the basis for capital allowances claims.

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  • The House admitted it “Shell, Total and First E&P violated Nigerian law for making capital allowances claims without CAFA certificate”.

The committee also said that the IOCs are not only bound by the PT Act but also do not have the right to choose which laws to follow and ignore, citing that the IOCs responded to the committee with stock certificates, capital allowances, and contributions to NNPC -JV and PSCs Account.

For the record: Nigeria’s crude oil exports rose to a record N11.53 trillion in the first half of 2022, an 88.5% increase compared to the N6.12 trillion recorded in the corresponding period in 2021 and a 39% increase from of N8.29 trillion in H2 2021.

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Nigeria’s crude oil exports accounted for 79.5% of the total exports recorded during the review period, representing the highest since the first half of 2019. Specifically, Nigeria exported goods between in January and June 2022 amounting to N14.51 trillion, an increase of 81.2% recorded in the same period in 2021.


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