Shell Petroleum Limited was questioned by the House of Representatives Ad-hoc Committee on Wednesday regarding the alleged tax evasion. The committee is looking into the structure and accountability of the joint venture (JV) business and production sharing contracts (PSCs) of the Nigerian National Petroleum Limited.S
The Committee is authorized to look into the alleged 22-year tax avoidance by some oil companies.
On Wednesday, the House panel heard from the Shell Petroleum Development Company of Nigeria, Total Energies, and First E & P representatives.
When the invitees presented letters of authorization to the panel, the Committee’s Chairman, Hon. Abubakar Hassan Fulata, backed down from his initial statement that the Committee could only attend to the Chief Executive Officers of Oil Companies. He also said that the CEOs would appear at a later time.
After learning that their tax-payment procedures did not follow Federal Inland Revenue Service Stock, the panelists expressed their outrage.
Fulata said: “FIRS does not rely on Stock Certificate of Crude Oil, as well as Certificate of Acceptance of fixed Assets (CAFA).
“The Stock Certificates gives clearer pictures of the oil being lifted while the CAFA certificate is the basis for capital allowances claims.”
Bashir Bello, the head of the Shell team, stated that SPDC has been in existence since 1929 and agreed to provide the investigation panel with all pertinent documentation, with the exception of the CAFA certificate confirmed that making capital allowances claims without the CAFA Certificate is against Nigerian law for Shell, Total, and First E & P.
The Companies disclosed in their individual filings that they have been submitting capital allowance claims under the Petroleum Tax Act rather than the contentious CAFA, which is housed at the Ministry of Industry.
In response, the Committee pointed out that other laws, which oil companies were required to abide by, were also used to direct their activities in addition to the Petroleum Act.
The panel required the oil businesses to provide the committee with stock certificates, capital allowances received, and contributions to the NNPC-JV & PSCs Account, among other things.
In the event that FIRS and other organizations ignored their invitation, the committee stated they would be forced to order the Inspector General of Police to enforce their appearance.