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Electricity fund: Oil coys to pay 2% profit

By Tordue Salem
ABUJA—A law seeking to empower the Federal Inland Revenue Service to deduct 2% of the profit made annually by every oil company registered in Nigeria awaits concurrence and passage into law by the Senate.

The Bill sponsored in 2008 by Rep. Ike Chinwo (PDP/Obiakpor/Rivers State), went through public hearing in the House of Representatives last year, but is yet to be read for the third time in the House of Representatives before the Senate concurs, preparatory to its assent by Acting President Goodluck Jonathan

“As from the commencement of this Act, there shall be charged and payable an annual energy development tax which shall be assessed, collected and administered in accordance with the provisions of this Act.

“The tax, which shall be at the rate of 2 %, shall be charged on the assessable profit of a company registered in Nigeria (in this Act referred to as “company”). The assessable profit of a company shall be ascertained in the manner specified in the companies Income Tax Act or Petroleum Profit Tax (in this Act referred to as “the Act”) as the case may be”, the bill proposes in its preamble.

The Bill, though many stakeholders in the petroleum sector see as being antithetical or conflicting with other pieces of legislation in the energy sector in the land. The FIRS, the bill proposes should “proceed to assess the company for the tax due under this Act.”

The oil companies are expected to pay the tax “within 60 days after the FIRS has served notice of the assessment on a company”. The Bill proposes for an establishment of a Fund, with a Board of Trustees, which may be referred to simply as board.

The Board is to consist of Minister who shall be a Chairman, the Chairman of the Federal Inland Revenue Service, Director-General of Energy Commission of Nigeria, Director-General of Atomic Energy Agency, Director-General of Nigeria Nuclear Regulatory Agency, Director-General of National Electricity Regulatory Commission and the Executive Secretary who shall be the Chief Executive of the Fund.

The Bill, which is underway to becoming law, would empower the President to appoint an Executive Secretary of the board on the recommendation of the President.


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