Home / News & Gist / FG Loses N1.2trillion Tax Revenue To Oil Pricing Dispute

FG Loses N1.2trillion Tax Revenue To Oil Pricing Dispute

[ad_1]



 

The Federal Government has recorded a revenue loss of over $4.04 billion (N1.232 trillion at N305-$1) in eight years, as a result of the protracted pricing dispute between the International Oil Companies, IOCs, Nigerian Extractive Industry Transparency Initiative, NEITI reports.

As at September last year, the funds trapped in various divisions of the tribunal that had not been adjudicated were estimated at over $5 billion or N1.5 trillion, almost the value of the N1.8 trillion 2016 capital expenditure.

Indications have however emerged that the Federal Government may not be able to recover the money as the IOCs have adopted strategies to evade payment.

Over the years, the IOCs have used the Tax Appeal Tribunal (TAT), which has the final say on any tax issue, to avert the payment of huge revenue accruable to the Federal Government from oil production.

The Nigerian government is almost solely dependent on oil revenue to execute its programmes.

The $4.05 billion would have ameliorated the financial challenges created by the economic recession, including funding of the budget for the development of the country.

Spokesperson for the Department of Petroleum Resources, DPR, Dorothy Bassey, who responded to a inquiry by the Guardian, said: “The industry has gone beyond this. However, I will send you the current status.” But she never did.

It was learnt that there is a long-standing dispute between the Federal Inland Revenue Service (FIRS) and oil- producing companies on the price to be used in valuing crude oil for the purposes of calculating the petroleum profits tax liability of international oil companies operating in the country.

In an effort by the DPR to resolve the dispute between the Federal Government and Oil Producers Trade Section (OPTS), in consultation with the Nigerian National Petroleum Corporation (NNPC) and FIRS, it said in 2013 that a realistic price should be used as fiscal price from January 2008 to June 2010. The agency also said that the Official Selling Price (OSP) should be used as fiscal price from July 2010 to December 2012, but the companies objected to the directive.

The Guardian learnt that the Tax Appeal Tribunal had ruled in favour of some IOCs that RP was the appropriate price to adopt in making the required calculation for the tax years in dispute, and that the RP was consistent with the provisions of the Petroleum Profits Tax Act.

 

 

 

 

[ad_2]

Source

Check Also

Singer Jhybo shares x-rated photo

While telling an unknown person to concentrate on the cap, singer Jhybo shared an x-rated …