The Nigerian House of Representatives has stated that International Oil Companies operating in Nigeria may be evading taxes by making capital allowances claims without the Certificate of Acceptance of Fixed Assets (CAFA).
This was disclosed during Wednesday’s plenary session as the committee investigating the Structure and Accountability of the Joint Venture (JV) Business and Production Sharing Contracts (PSCs) probed Shell Petroleum Development Company of Nigeria, Total Energies and First E and P.
They noted that the CAFA certificate signified the basis for capital allowances claims.
Not sufficient: The Committee, chaired by Rep. Abubakar Fulata, revealed that the taxes paid to the FIRS by IOCs were not sufficient, as FIRS does not rely on Stock Certificate of Crude Oil and Certificate of Acceptance of fixed Assets, he said.
Reo Fulata also added that the Stock Certificates gave clearer pictures of the oil being lifted while the CAFA certificate was the basis for capital allowances claims.
- The House claimed that “Shell, Total and First E & P were in violation of Nigerian law for making capital allowances claims without the CAFA certificate”.
The committee also said the IOCs were not only bound by the PT Act but also had no right to select which laws to obey and disregard, citing that the IOCs respond to the committee with a stock certificate, capital allowance enjoyed, and the contributions to NNPC-JV and PSCs Account.
For the record: Nigeria’s crude oil export rose to a record N11.53 trillion in the first half of 2022, an 88.5% rise compared to N6.12 trillion recorded in the corresponding period of 2021 and a 39% increase from N8.29 trillion in H2 2021.
Nigeria’s crude oil export accounted for 79.5% of the total exports recorded in the review period, representing the highest since the first half of 2019. Specifically, Nigeria exported merchandise between January and June 2022 worth N14.51 trillion, an increase of 81.2% recorded in the same period of 2021.
