Tax Evasion: Senate Stops International Oil Companies From Lifting Crude Oil

The companies were directed to pay requisite tax to the Federal Inland Revenue Service (FIRS).

Giving the directive when Gbenga Komolafe, the Commission Chief Executive of NUPRC, the successor of the Department of Petroleum Resources(DPR) under the Petroleum Industry Act(PIA) appeared in an interactive session with the senate committee on revenue losses in the maritime sector, Chairman of the Senate Committee on Finance, Senator Solomon Adeola (APC, Lagos West) stated that from the preliminary findings of the committee, there is a need for serious investigations of all foreign companies that are lifting Nigeria’s 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 is 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 the 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.