$24bn Oil swap deals: Diezani fails to show up before House Committee

*Nigeria's House of Representatives.

*Nigeria’s House of Representatives.

*Trafigura, Duke Oil owe $651m in taxes, says FIRS

Oscarline Onwuemenyi

03 March 2016, Sweetcrude, Abuja – The former Minister of Petroleum Resources, Diezani Alison-Madueke failed to heed the summons of the House of Representative AdHoc Committee investigating the controversial oil swap deals implemented during her tenure as minister.

Meanwhile, the Federal Inland Revenue Services, FIRS, yesterday disclosed that two major oil marketers engaged by Petroleum Pricing Marketing Company, PPMC, for the crude oil for petroleum products otherwise called ‘oil swap’ failed to pay taxes worth $651 million in four years.

From the amount, Trafigura defaulted in paying taxes worth $642,536,470, while Duke Oil owes $4.7 million on imported petroleum products under the swap deal between 2010 and 2014.

This was disclosed by a Director at the FIRS, Olayemi Ajayi, gave the information while addressing the House of Representatives Ad-hoc Committee investigating oil swap agreement estimated at $24 billion.

While giving update on the activities of Customs on importation of petroleum products into the country, the Nigerian Custom Service Assistant Comptroller (Trade and Tariff) Anthony Ayalogu, informed the committee that Customs had been prohibited from participating in the verification and ascertaining the actual petroleum products imported into the country through a letter from a former Permanent Secretary in the Federal Ministry of Finance since 2008.

Worried by the security implication of the purported letter, Chairman of the Committee, Zakari Mohammed, directed that the letter is set aside immediately. He mandated the Comptroller General of Customs to verify and ascertain vessels importing petroleum products into the country.

Mohammed also directed the former permanent secretary, who signed the exclusion letter to appear before the committee to explain the rationale behind the “love letter”.

According to him, “That letter should be set aside immediately. We believe that you have to do your job. As far as we are concerned, you are established by the Act of Parliament and cannot be stopped by a mere letter from a permanent secretary because that letter is susceptible to denial,” he said.

Former Minister of Petroleum Resources, Diezani Alison-Madueke, who was mandated to appear before the committee yesterday did not show up.

The chairman did not, however, give the committee’s position on the non-appearance. Alison-Madueke is presently standing trial in the United Kingdom on allegations bothering on money laundering and corruption. A member of the committee, Toby Okechukwu, alleged that Transfigura did not import any petroleum products into the country. According to him, the findings led to the investigative public hearing.

Okechukwu, who expressed concern over the security implication of the exclusion/suspension of Customs from its constitutional functions, argued that continuous breach of the Excise and Duties is not healthy for the Nigerian economy.

Meanwhile, Executive Chairman, FIRS, Mr. Tunde Fowler, said it had set specific strategies to increase tax collection to drive its proposed targets in 2016.

Mr. Fowler stated this in a document he signed and made available to the media in Abuja yesterday. He said the overall target was to ensure that Value Added Tax, VAT, and Corporate Income Tax, CIT, become the largest contributors to tax collection in 2016.

Fowler said in ensuring that VAT and CIT contributed more, the service would also ensure that collections from other taxes were significantly increased.

The chairman said the strategies to achieve its targets included ensuring a minimum of 90 percent compliance across all tax types and all taxpayer categories, adding that the said the service would achieve 90 per cent compliance by increased focus on sector based audits to ensure that all audit backlogs were cleared.

Fowler said FIRS would ensure maximum possible registration of taxpayers and would ensure the use of technology to block leakages and improve efficiency in collection. He said the service would strengthen tax administration by appointing new sector heads to drive compliance in the identified sectors, to improve performance management.

According to him, the service planned to improve in-house capacity building by training and re-training of staff sectors to improve working relationship with state boards of internal revenue on data sharing and joint audits.

The service, he added, would increase use of taxpayer education, publicity and enlightenment to achieve improved compliance.

The chairman said the service had begun extensive nationwide tax audit to ensure strict compliance with the provision of tax laws. Fowler added that the service also planned to carry out extensive nationwide tax compliance in 2016.

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