Mr Tunde Fowler Chairman, Federal inland Revenue Service (FIRS), Tax
Mr Tunde Fowler Chairman, Federal inland Revenue Service (FIRS)

The Federal Inland Revenue Service (FIRS) has requested for evidence that General Electric International Operations Nigeria Ltd remitted the excessive tax it withheld from Arco Group Plc, for nine years.

In recent times there has been series of allegation that General Electric (GE) withheld tax in excess of $3 million from its payments to Arco Group Plc, a Nigerian oil servicing company.

Series of allegations by both parties

GE had earlier engaged Arco for the supply of local personnel, it was alleged that GE deducted 10% as withholding tax for a servicing contract from 2006 to 2015 as against the 5% stipulated by Nigerian laws.

Arco in a letter addressed to FIRS seeking an explanation over the deductions, noted that its interpretation of the contract of supply is that the applicable WHT rate should be 5% in line with the Federal Inland Revenue Service Circular No. 2006/02 dated February 2006.

Responding to the letter, Chairman FIRS, Mr. Babatunde Fowler, noted that the FIRS circular in question classified the supply of personnel, personnel protective equipment and uniforms, office equipment and furniture, vehicles and fueling as contained in the contract document could only be charged five percent withholding tax (WHT). The deductible rate for site accommodation or rent, he said, was 10 per cent.

Fowler then demanded evidence that GE remitted the WHT deducted from Arco over the nine-year period

The Chairman further said GE must make available to Arco

“all outstanding WHT Credit Notes in respect of remittances made in its favor”.

The sums in contention are €56,577.61, $2,923,642.36  and N360,482,041.19.

Deal book 300 x 250

About the company

Arco Group Plc is a leading oil and gas servicing firm with over 35 years’ experience in the Nigerian Oil and Gas industry. The Group offers local partnership solutions that deliver outstanding service through a team of over 400 indigenous employees.

General Electric has been operating in Nigeria for over 40 years, with businesses spanning a number of key sectors including aviation, power, oil and gas, healthcare, and rail transportation.

 

Fikayo has a degree in computer science with economics from Obafemi Awolowo University. ITIL v3 in IT service management. An alumnus of Daystar Leadership Academy. Prior to joining Nairametrics had stinct in Project management, Telecommunications among others. Also training in Consulting and Investment banking from Edubridge Academy. He has very keen interest in Politics, Agri-business, private equity and global economics. He loves travelling and watching football. You can contact him via fikayo.owoeye@nairametrics.com

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