The House of Representatives Committee on Public Accounts has summoned Niyi Adebayo, Minister of Industry, Trade, and Investments; Abubakar Malami (SAN), Minister of Justice and Attorney-General of the Federation; and the Federal Inland Revenue Service to explain why some companies were not given a certificate of acceptance before being allowed to enjoy tax holidays.
The invitation was issued as a result of a disagreement between parliamentarians and the management of Nigeria Agip Oil Company regarding the suitability of the certificate as a requirement for firms operating in Nigeria to enjoy a tax holiday.
At the investigation hearing on Friday, the committee’s chairman, Oluwole Oke (PDP), argued that the certificate of acceptance was required to claim capital allowances and enjoy a tax holiday.
The Divisional Manager, Tax and JV Coordination, NAOC, Oluwole Agbede, however, said the certificate was not needed due to the nature of their work.
Explaining why Total Exploration and Mobil Producing should have the certificate while Agip should not, Agbede noted that the two companies could have such a certificate for their offshore operations.
Agbede also noted that Agip had three sister companies that shared the same management and the same costs as well as file transferring same transfer pricing reports.
He stated that the NAOC did not have a certificate of acceptance from the Federal Ministry of Industry, Trade, and Investments to claim capital allowances from the government.
Responding to a question on why the Agip did not have the certificate, Agbede said under the Petroleum Profit Tax, the certificate was not a requirement to claim capital allowances.
Agbede added, “We claim capital allowances based on the 20 percent of the JV agreement that belongs to us. We have a JV agreement and the NNPC is the principal partner with 60 percent of the assets of the operation.
“The other JV partner, Oando, has 20 percent while Agip has 20 percent. 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.”
Ada Peter
