President Goodluck Jonathan has mandated the Federal Inland Revenue Service (FIRS) and other government agencies to immediately recover $7.8 billion unpaid taxes from International Oil Companies (IOCs) operating in the country.
The affected IOCs, some of which have begun divestment process in Nigeria as a way of repositioning their operations in the country include Royal Dutch Shell Plc., Eni SpA, Total SA, Exxon Mobil Corporation and Chevron Corporation.
The new presidential directive, according to sources was based on the recent report of the Nigerian Extractive Industries Transparency Initiative (NEITI), which was believed to have stunned the president especially with the level of alleged tax evasion by some of the oil companies.
Also, sources say that the Economic and Financial Crimes Commission (EFCC) has begun assembling a team to probe oil marketers over allegations of manipulating fuel pumping machines to cheat customers.
“The president has ordered the FIRS and other agencies involved in the collection of taxes and royalty in the oil industry to look into the matter. He is expecting a report from them on this,” the source said.
NEITI had in its latest audit report, said the joint ventures (JVs) of the Nigerian National Petroleum Corporation (NNPC) and IOCs operating in the country evaded $7.8 billion in unpaid and underpaid taxes.
According to the audits, the Federal Government has experienced a potential revenue loss of $9.8 billion as a result of under-assessments and under-payments of taxes and rents, process manipulation and poor interpretation of agreements between the government and companies. It added that it had already helped recover $2 billion but $7.8 billion remains outstanding.
A source within NEITI told our correspondent in Abuja that the president has declared his readiness to recoup the money. “You are aware that the president in June last year showed high level of commitment that his government was willing to recoup the unpaid taxes and I believe this latest move gives credence to the fact that many wrongs revealed by our report are being addressed.
“Our demand however, is that we want a comprehensive implementation of the report. Other aspects revealed in the report also need the attention of the president,” the source stated.
However, previous reports by NEITI had come under serious attacks by stakeholders. Earlier in the year, the Nigerian National Petroleum Corporation (NNPC), vehemently denied findings by NEITI that suggested the company owed the government $8.16 billion for crude oil sales made between 2009 and 2011.
An industry source suggested that NEITI had misunderstood some of the figures it was given in its last report and clarification had been sought.
Total “recently conducted a tax audit over five fiscal years. The audit showed that the group respected its tax duties vis-avis the Nigerian state even if some points were still being discussed relating to amounts substantially lower than those which could be extrapolated from the figures announced,” a spokesman for the French major said.
Shell and Eni declined to comment while Chevron and Exxon were not available to comment.