Alleged $642.5m Debt: Trafigura Says It Has No Tax Obligation in Nigeria

1
2905

By Ejiofor Alike in Lagos and Damilola Oyedele in Abuja

Trafigura Beheer BV (TBBV), a company legally incorporated and resident in the Netherlands, has refuted the claim by the Federal Inland Revenue Service (FIRS) that the Amsterdam-based company owes the federal government $642.5 million in taxes from the crude oil swap deal worth $24billion.
FIRS had told the House of Representatives Ad hoc Committee investigating the swap deals that the figure accrued in taxes from 2010 was ($613.7 million), 2011 ($2.7 million), 2012 ($2.5 million), 2013 ($2.4 million) and 2014 ($2.2 million) and other estimates of the revenue agency.

The oil trading firm in four years was said to have lifted 12.5 million metric tonnes of crude oil, without paying any tax to the federal government, according to FIRS.
Trafigura’s Managing Director (West Africa), Mr. James Juslin, who was absent when FIRS made the claim, was said to have insisted at an earlier session that the firm was not required to pay tax, as it is a non-resident company, even though FIRS’s Director, Mr. Olayemi Ajayi, said Trafigura was required to pay tax to the Nigerian government.
Also in a swift reaction, Trafigura’s Head of Media and Corporate Affairs, Victoria Dix, said in a statement made available to THISDAY at the weekend that the company does not have an income tax or any other tax obligation in Nigeria.

According to her, Trafigura did not import petroleum products into Nigeria as Pipelines and Products Marketing Company (PPMC), a subsidiary of NNPC, was responsible for all inward customs clearance and importation.
She also said neither Trafigura nor any of its subsidiaries has an office in Nigeria or staff -employees or third parties locally acting on behalf of the company.
“No inventory was kept onshore and/or bonded storage. In the absence of these, both under Nigerian and international tax law TBBV has no obligation to register for tax purposes in Nigeria. As a result, the company does not have an income tax or any other tax obligation in Nigeria. We will continue to work with the FIRS in a constructive manner to this effect,” she explained.
She revealed that in October 2010, Trafigura entered into a Refined Products Exchange Agreement (RPEA) or swap agreement with PPMC in Nigeria.
According to her, the agreement was a standard international trading contract governed by Incoterms commercial rules.

“The swap agreement covered the supply of crude oil by PPMC to TBBV in exchange for refined products. TBBV chartered vessels for the purpose of delivering refined products to PPMC and taking delivery of the corresponding swap of crude oil at the designated ports. PPMC was responsible for all inward customs clearance and importation.  As for all international companies lifting crude from Nigeria, the crude oil exports were carried out on a FOB basis as per NNPC’s general terms and conditions,” she explained.
She further stated that Trafigura had presented to the House Committee on Petroleum Resources (Downstream) on numerous occasions in relation to this swap agreement, adding that each review and corresponding representation made had been found to be complete and beyond further enquiry.

In his reaction, the Chairma of the House Ad hoc Committee, Hon. Zakari Mohammed, in a telephone conversation, said the committee would adopt the position of the FIRS on the tax status of Trafigura.
“FIRS has told us their position. Between Trafigura and FIRS on tax matters, we are inclined to believe the FIRS. Its institution to institution, they are the legitimate body to talk about tax matters,” he said.
He also disclosed that the company is yet to furnish the committee with its tax details in Amsterdam.

  • Alhajivinco

    The tax authorities are dunces. How can a non-resident company owe taxes in Nigeria when it is not ‘in jurisdictionem’, ie, it is not within the jurisdiction of Nigeria, and therefore is outside the jurisdiction of our tax authorities? If they mean that it failed to remit certain royalties due from oil received and sold on behalf of NNPC, that is quite another matter. So Mr FIRS, which one are you talking about?