Companies that benefited from fuel subsidy trillions paid no tax

The hundreds of fuel importing companies that for years earned trillions of naira in fuel subsidies, paid no taxes on the product, the federal tax office said on Wednesday as more details of the subsidy management continues to emerge.

The Head of the Federal Inland Revenue Service (FIRS), Ifueko Omogui Okauru, said a federal government waiver, which lawmakers have queried and are asking for further proof, exempted the companies from paying tax on petrol, diesel and kerosene, even when they reaped trillions from subsidy payouts.

 

She spoke at the ongoing House of Representatives hearing on how years of subsidy were managed.

 

Mrs. Omogui said that it was a government policy not to charge Value Added Tax (VAT) on the products to save Nigerians from paying heavily for the products.

 

“Government has been very sensitive on the issue of tax on petroleum products which is a major source of revenue,” she said.

 

A revised version of the VAT which may block that privilege is underway, and will be presented to the National Assembly shortly, the agency’s boss added.

 

But the details, shocking even to the lawmakers, have only added to the series of mind-boggling revelations that have emerged in the course of the two-week old public hearings.

 

The legislators believe this failure may have cost the nation hundreds of billions in revenues since 2006, and that it reflects how vital sources of government funding are either casually managed or willfully neglected.  

 

The House committee leading the investigation, headed by Farouk Lawan, ordered the FIRS to provide a paper of authorization and names of all the companies that benefited from the waiver, as well as details of income and other taxes paid by the companies.

 

As the hearings progress, more companies with questionable conducts are being put in the spotlight, with several records of subsidy overpay, irreconcilable data of product supply records, and outright falsification of records.

 

On Wednesday, Total Oil Nigeria made an alarming presentation of what generally appears typify the subsidy management.

 

The company’s Managing Director, Francois Bussagol, said the company was paid N11 billion in 2010 for the importation of 251 million liters of petrol.

 

Astonishingly, in 2011, the same company was paid N16 billion for importing 211 million of liters – a far lower quantity of fuel yet for a higher pay.

 

The details sparked outrage at the hearing.

Mr. Bussagol denied the company ever received overpayment for imported products, but when pressed further, adjusted his position to claim that any overpayment had been paid back to the Department of Petroleum Resources.

 

Support PREMIUM TIMES' journalism of integrity and credibility

 

Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.

For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.

By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.

Donate


NEVER MISS A THING AGAIN! Subscribe to our newsletter

* indicates required

DOWNLOAD THE PREMIUM TIMES MOBILE APP

Now available on

  Premium Times Android mobile applicationPremium Times iOS mobile applicationPremium Times blackberry mobile applicationPremium Times windows mobile application

TEXT AD: To place a text-based advert here. Call Willie - +2347088095401


All rights reserved. This material and any other material on this platform may not be reproduced, published, broadcast, written or distributed in full or in part, without written permission from PREMIUM TIMES.