25 April 2016, Sweetcrude, Abuja — The Nigerian National Petroleum Corporation (NNPC) is owing over $300 million in tax arrears, the Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, has said.
Fowler, while speaking before the Hon. Michael Enyong Okon headed Adhoc Committee Investigating the FIRS’ accounting procedure, said the computation of the outstanding was done by the NNPC itself.
On NNPC’s non-compliance with the issue of the tax return, he said all unresolved matters will be sorted out at the conclusion of the ongoing audit exercise, adding that the FIRS should have a proper assessment at the end of the audit of the NNPC in June.
He noted that “On the taxable profits of companies, (under NNPC), I cannot give any specific information regarding the amount until the audit report for last year is ready for assessment.”
He, however, said the Corporation has promised to get back to the Agency with a plan on how to defray the outstanding, stating that the self-assessment by companies as done by the NNPC was not final.
“We are also deploying a system where all outstanding taxes owed by companies are recalled using automated platform. Right now, many companies, on the basis of that are doing self-assessment and have promised to remit all outstanding Value Added Tax (VAT) owed.
“One of the key things we did to ramp-up the revenue base when I was in Lagos, was to do a comprehensive audit, and I believe if we apply the same method, we will achieve the same result and even more. I know that those I met on the ground did their best to enhance the process and we are currently building on what they put on ground,” he said.
Fowler said Nigeria is part of countries losing about $250 billion through evasion/ underpayment of taxes, adding that there is the need for a sensitive and pro-active tax collection and management regime.
“We tend to believe that companies, especially multinationals would declare their figures properly, but organisations that deal with tax have estimated that well over $250 billion is lost every year in tax revenue from companies that file low revenues as returns.
“So, I think we just have to change our approach and assume that everyone is guilty until proven innocent when it comes to the issue of tax,” he stressed.
On their part, the lawmakers insisted in knowing why the FIRS withheld part of the N7.5 billion tax refunds meant for some companies that had been overtaxed. The agency had requested for the funds from the Office of the Accountant-General of the Federation (OAGF), received it, but some of the affected companies alleged that they never got it.
The Committee chair wondered why the FIRS would receive the amount only to deprive some of the firms that have legitimate claims on the refund.
Responding, Fowler said in the case of tax refund, the N7.5billion released on19th December, 2014, from the Committee’s investigation, revealed that some of the said approved cases were not implemented as monies received, were not paid to all those who were listed in the request, adding that certain criteria were used for consideration and payment in order to avoid paying an undeserving companies.
He, however, promised to look into the matter, with the assurance that such an incident would not occur again.