Tax Evasion: Bayelsa Govt At War With Shell, Agip, Chevron

For tax evasion and flouting laws of the land, Bayelsa State Government is up in arms against multinational oil companies operating in the State, including  Shell Petroleum Company of Nigeria Limited (SPDC); Nigerian Agip Oil Company Limited (NAOC); Chevron Nigeria Limited (CNL); Consolidated Oil (CL), and others like Conoil Producing; Brass LNG and Aiteo Energy.

These companies have consistently failed to pay taxes and other levies due to the State, including 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, says Bayelsa State Governor Seriake Dickson in a letter he fired to President Muhammadu Buhari alerting him of the deteriorating relationship between him and the oil multinationals.

The letter, also copied to Vice President Yemi Osinbajo (SAN), dated April 18, 2016 and obtained by State House Correspondents on Thursday in Abuja, sought waivers from the Federal Government to enable the State Government gets its pound of flesh from the multinationals.

Under extant Nigeria's Federal legislation, the oil companies are licensees of the Federal Government

However, Dickson, former Federal lawmaker and a lawyers maintains  that the oil companies must equally comply with laws by the State government: “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." he argued.

Beyond the correspondence, the State  government, had within the week, sealed off SPDC's facility in Gbaran Ubie Integrated Oil and Gas, for defaulting  in the payment of taxes and levies.

The Executive Secretary of Bayelsa State Physical Planning and Development Board (BSPPDB), Boro Ige-Edaba, who announced the measure, in a statement, explained that the government relied on an eviction order issued against the company by a Bayelsa 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 Board conduct environmental, health, technical integrity and safety checks on the facility, adding that the facility was built without a building permit, as required by Law. 

 He added that the Shell facility at Gbaran, occupied a massive land area measuring 2million square metres, more than half of Lagos Island,( in Lagos State) with about 3.9 million square metres.

In his letter, Dickson has noted that “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 the illegal structure for 6 years. The State Government and its agencies are now enforcing compliance to applicable laws and standards."

The State Governor while urging  President Buhari to prevail on the companies, who are licensees of the Federal Government, to comply with the laws of the State and of our Country, however assured him that:

“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" he concluded.
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