Court Orders Mobil To Pay
$83.4m Education Tax To FIRS
MOBIL
Producing Nigeria Unlimited was Friday ordered by the Tax Appeal Tribunal,
Lagos Zone, to pay the sum of $83.4 million (N13 .09 billion) to the Federal
Inland Revenue Service (FIRS) as education tax liability for the year 2008.
The five-man tribunal presided by Mr. Kayode Sofola (SAN) gave the order in a landmark judgment on an appeal filed by the oil exploration company against the FIRS.
The company filed the appeal on May 5, 2011, after the FIRS issued it an education tax assessment of $83.4 million for the year 2008. Mobil’s counsel, Mr T. Emuwa, had claimed that the assessment breached the Memorandum of Understanding signed by the company with the Federal Government of Nigeria and the Nigerian National Petroleum Corporation (NNPC) in 2000.
Emuwa said the 2000 MoU allowed the company in computing its education tax liability to deduct all amounts it incurred in paying taxes and levies to the Federal, State Governments and other agencies.
However, the FIRS, had through its counsel, Mrs B.H. Oniyangi, claimed the 2000 MoU was signed for a three-year term, adding that its validity ended on January 1, 2003.
According to Oniyangi, the Federal Government had through a letter issued by the Department of Petroleum Resources (DPR) on January 17, 2008, also confirmed that the MoU had expired.
The counsel contended that the 2000 MoU was replaced by the Petroleum Profits Tax Act (PPTA), which was used to issue the disputed assessment.
In the judgment, Sofola agreed that the said MoU was only for a three-year term, noting that there was no evidence before the panel that it was renewed.
He said: “The 2000 MoU thus expired at the end of 2002. The parties never did anything to keep it alive longer, as stated in clause 7.1. In effect, clause 7.1 contains an’option to renew’, exercisable at the joint instance of all the parties. This option was never exercised, an thus no renewal or extension was triggered.”
The five-man tribunal presided by Mr. Kayode Sofola (SAN) gave the order in a landmark judgment on an appeal filed by the oil exploration company against the FIRS.
The company filed the appeal on May 5, 2011, after the FIRS issued it an education tax assessment of $83.4 million for the year 2008. Mobil’s counsel, Mr T. Emuwa, had claimed that the assessment breached the Memorandum of Understanding signed by the company with the Federal Government of Nigeria and the Nigerian National Petroleum Corporation (NNPC) in 2000.
Emuwa said the 2000 MoU allowed the company in computing its education tax liability to deduct all amounts it incurred in paying taxes and levies to the Federal, State Governments and other agencies.
However, the FIRS, had through its counsel, Mrs B.H. Oniyangi, claimed the 2000 MoU was signed for a three-year term, adding that its validity ended on January 1, 2003.
According to Oniyangi, the Federal Government had through a letter issued by the Department of Petroleum Resources (DPR) on January 17, 2008, also confirmed that the MoU had expired.
The counsel contended that the 2000 MoU was replaced by the Petroleum Profits Tax Act (PPTA), which was used to issue the disputed assessment.
In the judgment, Sofola agreed that the said MoU was only for a three-year term, noting that there was no evidence before the panel that it was renewed.
He said: “The 2000 MoU thus expired at the end of 2002. The parties never did anything to keep it alive longer, as stated in clause 7.1. In effect, clause 7.1 contains an’option to renew’, exercisable at the joint instance of all the parties. This option was never exercised, an thus no renewal or extension was triggered.”
http://www.theguardianmobile.com/readNewsItem1.php?nid=14687
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