Withholding Tax Refund: Labour Ministry Urges GEION to Honour Agreement with Arco


Martins Ifijeh

Following the withholding tax dispute between General Electric International Operations Nigeria (GEION) and Arco Group Plc (Arco), the Ministry of Labour and Employment has directed the former to honour agreement to ensure industrial harmony.

In a letter sent to GEION by the ministry, and cited by THISDAY, the Permanent Secretary, Federal Ministry of Labour and Employment, William Alo, said its reconciliatory meeting with relevant parties on the dispute had earlier drew up conclusions which all parties were advised to honour.

The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) had earlier complained that Arco failed to pay the terminal benefits of its former workers, who were former members of PENGASSAN. But the management of Arco claimed that they were unable to pay the terminal benefits because their principal, GEION over-deducted withholding tax and had refused to make necessary refunds.

Alo said following these complaints, the ministry on September 24, 2019 brokered a conciliatory meeting with relevant parties, while also extending invitation to the Federal Inland Revenue Service (FIRS).

He said: “At the meeting, FIRS confirmed its readiness to refund the over-deducted sums to GEION upon necessary application to enable Acro fulfill its obligations to the erstwhile workers. We therefore made conclusions which parties are expected to abide by,” he said.

The conclusions reached, according to documents seen by THISDAY said that GEION should apply to FIRS and request for the refund of the over-deducted sums paid to FIRS as agreed during the reconciliation meeting; that both GEION and Arco should go back and within two weeks, reconcile the deductions. “However, for the sums agreed upon, both managements should do the needful and ensure that the concerned workers are paid within one week,” the document shows.

It also showed that all tax deductions made by GEION on behalf of Arco substantiated with documentary evidence, with the objective of remitting to FIRS, but which were not remitted to FIRS, should be refunded to Arco within three days.

“That the sum confirmed by the Lagos State Inland Revenue Service Office as haven been remitted by GEION, but which is under dispute should be reconciled between GEION and FIRS within two weeks to pave the way for further action,” the document showed.