- Commodity trader says local tax laws didn't apply to swap deal
- Nigeria's House of Representatives investigates oil deals
Nigeria’s revenue agency said Trafigura Beheer BV owes back taxes for handling 12.5 million metric tons of crude oil through swap contracts with the government between between 2011 and 2014.
The Amsterdam-based oil trader didn’t make tax declarations in Nigeria for the volumes, according to a presentation by the Federal Inland Revenue Service in the capital, Abuja, on Wednesday to a House of Representatives committee investigating refined product exchange agreement contracts. James Joseph, managing director of Trafigura in West Africa, told the committee the company is outside Nigerian tax jurisdiction.
“We do offshore business and offshore trading, we are not registered in Nigeria,” he said. “Your tax law doesn’t apply to us.”
Nigeria’s government in August terminated deals swapping crude for refined imported refined products between the state-run Nigerian National Petroleum Corp. and oil traders after a review found the terms were unfavorable. Trafigura wasn’t one of three companies affected by the cancellation, the government said.
Nigeria is Africa’s top oil producer, though it depends on imports for most of its requirements because its refineries are poorly maintained and have inadequate capacity.
President Muhammadu Buhari took office eight months ago as the slump in crude prices was wreaking havoc on the economy, which relies on oil sales for about two-thirds of government revenue. In a bid to improve transparency in the sector, Buhari disbanded the NNPC’s board and said he will overhaul crude sales and imports of refined products.
Nigeria’s transparency watchdog says the NNPC has diverted more than $30 billion in oil revenue from the state since 2009. NNPC executives have repeatedly denied wrongdoing.
The committee hearing will continue on Feb. 2 where Emmanuel Kachikwu, petroleum minister of state and head of the NNPC, will give his testimony.