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NEITI, FIRS, OTHERS TO END OIL SECTOR LOSSES

By NBF NEWS

The Nigerian Extractive Industry Transparency Initiative, the Federal Inland Revenue Service, the Department of Petroleum Resources and other agencies concerned with the extractive industry on Thursday committed themselves to ensuring transparency in the accounting of the proceeds from the sector.

The agencies made the commitment at the NEITI high-level roundtable in Abuja.

In his speech, the Executive Secretary, NEITI, Mallam Haruna Sa'eed, said the body had completed a comprehensive study on the metering infrastructure in Nigeria with interesting findings and far-reaching recommendations.

He said, 'The era where Nigerians do not know how many barrels of oil is produced will become history when these recommendations are implemented.'

The executive secretary further explained that NEITI was engaging international and indigenous oil companies operating in Nigeria to ensure timely compliance to the sector's audits.

In her speech, the Chairman, FIRS, Mrs. Ifueko Omoigui-Okauru, confirmed that there had been underpayment of taxes by oil companies, adding that FIRS had undertaken audits and reviews of tax returns of the companies between 1999 to 2004.

She said, 'Additional assessments have been raised for $605.9m and N2.55bn. To date, payment has been made of $162m and N105m respectively of the assessed amounts.

'The objections raised by the oil companies in respect of the outstanding amounts are being resolved and the FIRS is in the process of recovering the outstanding payments.

'However, some of the issues involved in the objections, would require resolution by the courts.'

To avoid recurring incidences of missing records of payment at the Central Bank of Nigeria, Omoigui- Okauru said the entire process of payment and reconciliation had been overhauled and was now electronically-based and fully automated.

She said, 'FIRS appointed certain banks as collecting banks, but also appointed lead banks to whom all remittances are lodged and who have the responsibility for making daily remittances.

'In this way, FIRS is able to determine at what stage of the reporting process a record was lost.'

On the discrepancies in costs and assets provided in the financial statements of oil companies and those provided in their tax returns, Omoigui-Okauru said the FIRS had designed a template for use by the Oil Producers Trade Section of the Lagos Chamber of Commerce.

She explained that the use of the template would minimise leakages.

The FIRS chairman also stated that the capacity of the employees of the agency would be improved through technical training and automation of the process and systems.

In his keynote address, the Acting President, Dr. Goodluck Jonathan, noted that the two sets of audit of the petroleum sector conducted by NEITI had exceeded the minimum EITI criteria.