Dickson writes Buhari, says multinational oil companies don’t pay tax
Adetokunbo Fakeye
The lingering crisis between Bayelsa State government and multinational oil companies deepened on Thursday with Governor Henry Seriake Dickson, seeking the intervention of the Presidency over tax evasion, flagrant disregard to laws and non-compliance with the rules and regulations of the country.
Oil companies identified as major culprits in tax evasion include Shell Petroleum Company of Nigeria Limited (SPDC); Nigerian Agip Oil Company Limited (NAOC); Chevron Nigeria Limited (CNL); Consolidated Oil (CL); Conoil Producing; Brass LNG and Aiteo Energy.
Gov. Dickson in the letter, which he personally wrote to President Muhammadu Buhari and Vice President Yemi Osinbajo (SAN) and dated April 18 2016 as obtained by State House Correspondents on Thursday in Abuja, pleaded that the government should not support the oil companies.
It reads inter alia: “Our further position is that the Federal Government and its agencies should not condone or support irresponsible behaviour by these companies whose conduct subvert and undermine the authority of the State and our economy especially in the areas we have legislative authority such as Development Control, taxes permitted by Federal Laws and other legislations within the residual powers of the State”.
Dickson specifically complained about defaults by oil and gas companies operating in the state to pay taxes and levies over time.
He therefore, urged the President to use his good offices to prevail on the companies concerned, who are licencees of the Federal Government, to comply with the laws of the state and that of the country.
It was reported that the SPDC’s facility in Gbaran Ubie Integrated Oil and Gas, was recently sealed over charges of default in the payment of taxes and levies.
The Executive Secretary of Bayelsa State Physical Planning and Development Board (BSPPDB), Boro Ige-Edaba, had in a statement earlier this week, announced the sealing of the property, relying on an eviction order issued by the State High Court in Yenagoa.
He said the eviction order had granted the government of Bayelsa State leave to effect the eviction of SPDC and all occupants of the premises to enable the Physical Planning and Development Board conduct environmental, health, technical integrity and safety checks on the facility.
Ige-Edaba contended that the facility was built without a building permit (called Development Permit) as required by Law.
The eviction order had granted the government of Bayelsa State leave to effect the eviction of SPDC and all occupants of the premises to enable the Physical Planning and Development Board conduct environmental, health, technical integrity and safety checks on the facility.
The facility was said to have been built without a building permit (called Development Permit) as required by Law.
The Court had also directed the Commissioner of Police, the Commander of the Joint Task Force (JTF) and all security agencies to facilitate the enforcement of the eviction.
But Dickson in his letter, chronicled the various negative exploration activities of the oil and gas companies operating in the state over a long period of time by refusing to pay land use service charges and development levies thereby impinging on the environment especially through spillage and indeed economy of the state.
Dickson emphasised the strategic nature of Bayelsa State as host community and the concomitant tremendous impact on the expenditure outlay of the state government in terms of security, community relations and other related expenditure as it strives to ensure a conducive and peaceful environment for the operators who are mostly multinationals.
He regretted, however, that the major oil firms have not been realistic by contributing proportionally to the economy and development of the state, a situation, he said, needed to be reversed.
“Sadly, the compliance level of the oil and gas exploration and production companies in payment of levies and taxes is very low and in fact, pitiable”, he stated.
While insisting that the situation, contravened the relevant legislations in the state, the governor accused the affected companies of not employing indigenes of the state nor awarding contracts to them.
He also claimed that these companies do not have offices in the state, while only a negligible percentage of their staff pay the Pay As You Earn (PAYE) tax as a basic legal obligation.
He listed the taxes and levies to include Pay As You Earn (PAYE), Infrastructure Maintenance Charge or levy, Development levy, Land Use Charge, Environmental (Ecological) Fees or levies, Property tax and Business Premises Registration.
The sealed Shell facility at Gbaran, Dickson stated, occupied a massive land area that is half of the size of Lagos Island measuring 2 million square metres whereas, Lagos Island occupies about 3.9 million square metres.
He claimed that likes of Shell all the other oil and gas companies occupy such large land areas without due commitment in terms of taxes and levies nor do they get relevant permits before embarking on construction at their various facilities.as required by law.
Dickson said, “Multinational Oil and Gas companies occupy large spaces of scarce land resource in the State without a commensurate contribution to the economy of the State. Beyond this, they also deliberately flout and contravene the laws of the State and of Nigeria. They do not pay taxes to the State.
“SPDC has never paid the Bayelsa State Infrastructure Maintenance Levy (BIM) since the commencement of the law in 2003. Additionally, none of these SPDC
assets in the State have Development Permits. Consequently, no levies relating to and required for the procurement of Development Permit or other levies and taxes have ever been paid.
“For instance, the Gbaran Ubie Oil and Gas project was developed by SPDC on about 2 million sq. m of land (more than half of Lagos Island) in BayelsaState without a Development Permit and commissioned in 2010 despite Stop-work orders and Notices since 2008 for SPDC to discontinue with the Development which had no Permit. Till date, SPDC has still not obtained a Development Permit and has continued to operate theillegalstructure for 6 years. The State Government and its agencies are now enforcing compliance to applicable laws and standards.”
Aside these listed cases of contraventions and non-compliances, Dickson also said that other applicable taxes and levies are not being paid or complied with by any of the listed Oil and Gas Companies.
The governor added this: “Mr. President, the Government of Bayelsa State is concerned that the Oil and Gas Companies deliberately flout and contravene the laws of State and Nigeria in particular, the State environmental laws, the Physical Planning and Development law and other State and national laws that bring tax and levy revenues to Bayelsa State.
“While we have played host to some of these companies, some since 1956, these companies have not contributed much to the economic development of the State, needless to say the numerous security issues the State has had to manage on account of their operations and the attendant degradation of the environment occasioned by their activities.
“Unfortunately, these Oil and Gas Companies have neglected, refused and failed to comply with extant laws. Rather, they use their preeminent position as the main drivers of the economy and their connections with officials and agencies of the Federal Government to frustrate and undermine the economy and authority of the State to avoid meeting their tax and other statutory obligations.
“Our State has clearly borne the brunt of the operations of all these multi-nationals all these years. Our position as a federating unit under the Constitution and laws of the Federal Republic of Nigeria is that the mining and Operating Licences, exclusively granted by the Federal Government, cannot be used as a basis for avoiding responsible behaviour required by the laws of Bayelsa State.
“Our further position is that the Federal Government and its agencies should not condone or support irresponsible behaviourby these companies whose conduct subvert and undermine the authority of the State and our economy especially in the areas we have where we have legislative authority such as Development Control,taxes permitted by Federal Laws and other legislations within the residual powers of the State.
“The Government of Bayelsa State assures Mr. President that its agencies and officials will follow due process in the enforcement of all the laws of the State in this regard. In all cases, the laws of the State have made provisions for judicial intervention where parties shall have opportunities to ventilate their grievances if dissatisfied.
“It is our expectation that the Federal Government will instruct all our Federal Agencies, particularly the Security Forces, not to obstruct the due processes of enforcement of our state laws or be used to harass or intimidate State officials or citizens involved in the process of enforcement of the Tax and other laws of the state.
“In any such event to contrary, we shall have no option than to seek judicial redress to
preserve our integrity as a State and guarantee our economic survival.
“Mr. President, under these circumstances, I humbly urge you to use your esteemed and good office to prevail on these companies, who are licensees of the Federal Government, to comply with the laws of the State and of our Country.”
