Senate orders NUPRC to stop foreign companies that evade tax from lifting crude oil from Nigeria

Senate has asked the Nigerian Upstream Petroleum Regulatory Commission, (NUPRC) to as a matter of urgency, stop all foreign companies lifting crude oil with their tankers from Nigeria without paying any tax until they pay requisite tax to the Federal Inland Revenue Service(FIRS).  According to the Senate through its Senator Olamilekan Adeola, All Progressives Congress, APC, Lagos West led Senate Committee on Finance, the directive is aimed  at recovering  and increasing revenue to bridge recurrent budget deficits. 

Speaking when Engr. Gbenga Komolafe, the Commission Chief Executive, the successor of Department of Petroleum Resources(DPR) under Petroleum Industry Act(PIA) appeared in an interactive session with the senate committee on revenue losses in the maritime sector, Senator  Adeola said that 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. Adeola 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.”

According to Adeola, only recently 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.  Adeola reiterated saying, “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.”

Senator Adeola who noted that  the Committee was  not ruling out the existence of a cartel that may be behind this huge tax evasion in dollars,  stressed  that at this point there should be 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, Engr. Komolafe who  explained the process for giving clearance for ships to lift Nigerian crude oil adding that as a new agency, they are still in the process of unbundling from the old DPR, however  promised to supply the hard copy of a list of companies lifting crude oil that he brought in soft copy alone.