By Christiana Ekpa
The House of Representatives Committee on Public Account yesterday summoned the Chairman of Federal Inland Revenue Service (FIRS), Muhammad Mani to explain tax clearance issued to Procter and Gamble (P&G) a U.S. company operating in Nigeria without payment of tax to the Federal Government.
The summon was as a result of the adoption of a motion by Rep. Zakaria Nyampa (PDP-Adamawa) at an investigative hearing on Tuesday in Abuja.
The committee is investigating revenue remittances of the company between 2016-2018 based on a query raised by the Office of the Auditor General of the Federation.
Moving the motion, Nyampa said that under the years under review, the turnover of P&G was N42 billion, N41 billion and N48 billion and their profit is nil.
He said there is need for FIRS to come and authenticate the clearance certificates paraded by P&G and explain reasons for the issuance.
“Chairman, permit me to take this as a motion, some of this year under review, 2017, 2016, 2018 where their turnover was N42 billion, N41 billion and N48 billion and their profit were nil.
“And FRIS went ahead to give them tax clearance, I want to move a motion that we invite FIRS to authenticate these certificates.
“And what are their financial returns, the things they find that FIRS was convinced that these people should not pay tax for those years under review, I so move Mr Chairman,” he said.
Seconding the motion, Rep. Solomon Karen (PDP-Plateau) said that based on the documents before him, he is so worried about the development.
He said that as a Nigerian, he is deeply concerned about the issue stressing the need for an in-depth investigation.
The Chairman of the Committee, Rep. Wole Oke in his ruling, directed the Clark to ensure compliance.
Oke explained that issuance of tax clearance certificate does not always depend of payment of taxes.
“Tax payer could be issued tax clearance certificates on several bases; it could also be tentative tax clearance certificate may be there is a business to pursue and they need tax clearance urgently to do so, they can be obliged.
“But once the financial year has come to an end, all the filing oath to be done; my worry is that, even though we have other options of assessing tax payer even when your operation resulted in a loss, we have other options.
“We can look at turnover basis, we can look at net current assets and all that; I am shocked that those options were not applied and yet your tax assessment read zero.
“Those are the issues, we cannot shave FIRS in their absence, they need to come here and tell us their own side of the story why we have this kind of situation,” he said.
Oke said that there is need to look into the import duty documents of P&G saying that the company imported equipment worth N6.4 billion in 217
“If you look at the acceptance given to you dated March 6, 2017, your foreign content was N6.4 billion for value of foreign content, machinery and equipment.
“We need to look at their asset register in their versions audited account and their value on this certificate of acceptance along with their import duty paid on the equipment imported worth N6.4 billion,” he said.
“The document you need to give us now are your important duty on the plant equipment and machinery.
“On your taxes, we will call FIRS to come and defend heir decision to give you zero tax assessment which means you did not pay education tax neither did you pay company income tax,” he said.
Earlier, the Financial Director of P&G,
Mrs Ogunbodele Emiola explained to the committee that in the years where profit was made, education tax was paid.
She said the operating business environment in the country in recent years had been very difficult.
“We have made significant investment, we have built a factory, the biggest and highest investment by any U.S. company in our industry in Nigeria and that was done during the period under assessment.
“We have invested a lot of efforts to turn around the business however, that has fallen short of the returns we expected to deliver in that period.
“We has to make a very difficult decision to shutdown that factory,” she said.