Senate Orders NUPRC to Stops Foreign Firms Evading Tax from Crude Oil Lifting

The Nigeria Senate has directed the Nigerian Upstream Petroleum Regulatory Commission (NUPRC ) to stop all International Oil Companies (IOCs) defaulting in tax compliance from lifting crude oil with their tankers from Nigeria until they pay the requisite tax to the Federal Inland Revenue Service (FIRS) .

 Chairman, Senate Committee on Finance, Senator Solomon Olamilekan Adeola (APC Lagos West), gave the directive when the Chief Executive of NUPRC, Gbenga Komolafe, appeared before the panel on issues concerning revenue losses in the maritime sector.

 The Senate explained that the directive is aimed  at recovering  and increasing revenue to bridge recurrent budget deficits.

According to Senator Adeola, from the preliminary findings of the committee, there is need for serious back duty investigations of all foreign companies which oil tankers are lifting Nigeria crude oil in relation to their compliance with tax obligations according to extant laws of the land.

He said: “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.”

He recalled 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 are no record of such payment with FIRS. We must recover all our revenue from this source”, he said.

Pointing out that  the Committee was  not ruling out the existence of a cartel that might be behind this huge tax evasion in dollars, Adeola stressed the need for collaboration and synergy between maritime agencies like 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.

Earlier. Komolafe who  explained the process of issuing clearance for ships to lift Nigerian crude oil, noted that as a new agency, NUPRC is still in the process of unbundling from the old Department of Petroleum Resources (DPR) but  promised to provide the hard copy of a list of companies lifting crude.