The House of Representatives Public Accounts Committee has summoned the Minister of Industry, Trade and Investments, Niyi Adebayo; the Minister of Justice and Attorney-General of the Federation, Abubakar Malami (SAN); and the Federal Inland Revenue Service to explain why some companies were not issued a certificate of acceptance before being granted tax breaks.
The invitation was issued as a result of a disagreement between lawmakers and the management of Nigeria Agip Oil Company regarding the necessity of the certificate as a prerequisite for companies operating in Nigeria to enjoy a tax holiday.
The committee’s chairman, Oluwole Oke (PDP), insisted at the investigative hearing on Friday that the certificate of acceptance was required to claim capital allowances and enjoy a tax holiday.
However, NAOC’s Divisional Manager, Tax and JV Coordination, Oluwole Agbede, stated that the certificate was not required due to the nature of their work.
Agbede explained why Total Exploration and Mobil Producing should have the certificate but Agip should not by pointing out that the two companies could use it for their offshore operations.
Agbede also mentioned that Agip had three sister companies that shared the same management, costs, and transferred the same transfer pricing reports.
He stated that the NAOC lacked a certificate of acceptance from the Federal Ministry of Industry, Trade, and Investments to claim government capital allowances.
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In response to a question about why the Agip did not have the certificate, Agbede stated that the certificate was not required to claim capital allowances under the Petroleum Profit Tax.
Agbede added, “We claim capital allowances based on the 20 per cent of the JV agreement that belongs to us. We have a JV agreement and the NNPC is the principal partner with 60 per cent of the assets of the operation“.
“The other JV partner, Oando, has 20 per cent while Agip has 20 per cent. When we incur the expenses, we distribute; and based on that, we share the percentage. Each of the partners will go back and prepare its tax return based on the share of the oil”.
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