A’Ibom Drags Oil Firm to Court over Unpaid N65bn Tax Liabilities

Ndubuisi Francis in Abuja

The Akwa Ibom State government has dragged an oil servicing companies operating in the state before the State Revenue Court over N80 billion Pay As You Earn (PAYE) tax liabilities spanning a 10-year period.

In two separate suits: REV/772C/2016 and REV/15C/2016 filed against Globestar Engineering Company (Nigeria) Limited before the state Revenue Court sitting in Uyo, the state capital, the state government is seeking the court’s declaration compelling the company to pay the sum of N65 billion PAYE tax due and payable on income of its employees for a period of 10 years, in compliance with the Personal Income Tax Act of 2004, as amended.

In the charge read by the State Counsel, Eyo Asuquo before the Revenue Court when the matter came up for hearing, the state government accused Globestar of failing to pay the tax on its personnel under the PAYE scheme regulation of 2004, to the Akwa Ibom State government’s treasury.

The state government resorted to the court action after discovering that many of the oil servicing companies operating in the state had failed to remit over N80 billion in PAYE tax on their over 3,000 workers in the last 16 years.
In the report of the said tax investigation, the Akwa Ibom State Government also alleged that Globestar Engineering Company had no history of remittances of the PAYE taxes on the expatriates deployed in over 15 project sites under Mobil Producing and Total (OFON) projects between 2000, and 2016 respectively.

Globestar was said to have recorded the engagement of over 5,000 expatriates, mostly on temporary work permit.
The company, according to the investigation by the Akwa-Ibom State Internal Revenue Services, owes the state government over N65 billion in cumulative PAYE taxes which it allegedly evaded for over 16 years.

Asuquo said the amount being demanded by the Akwa-Ibom state government represented only the periods from 2005 to 2014 tax years.

Globestar was therefore, accused of having committed an offence punishable under Section 94 sub-section 1 of Personal Income Tax Act 2010 for which the Akwa-Ibom state government is seeking enforcement.
The legal counsel to the defendant from the chambers of Adepetun, Caxton-Martins Agbor Segun, (ACAS LAW), however, prayed the court to allow both parties out of court settlement.

The charge read in part: “That you, Globestar Engineering Company Nigeria Limited of number 39, Alfred Road, Ikoyi, Lagos state on the 7th day of February, 2013;

Being an employer required under section 81 of the Personal Income Tax Act of 2004 and Sections 7 & 8 of the Operation of Pay As You Earn (PAYE) Scheme Regulations of 2004 to deduct Income tax from the emoluments of your employees and remit same to the complainant, did fail to comply with provision of Section 47 which resulted to application of Section 54 of the Personal Income Tax Act of 2004 with the sum of N65, 910, 721, 622. 96 only, being Pay As You Earn (PAYE) tax from the salaries of members of your staff for the period of 2005 – 2014 and thereby committed an offence punishable under Section 94 (1) of the Personal Income Tax Act 2010.”

The report of tax investigation carried out on companies that have over the years evaded tax and those that have under-remitted taxes due and payable to Akwa Ibom State, shows that the oil servicing companies failed to comply with the tax laws of the host country, Nigeria.

Oil servicing companies operating in the state are said to owe the state over N80 billion in PAYE tax liabilities spanning a 10-year period.