The report comes as the New York Times today praised Nigeria for its efforts to combat corruption that wastes 65 percent of its national budget and as the government of President Olusegun Obasanjo cracks down on tax evaders, mail fraid, customs cheats and the theft of more than 11,000 barrels daily of its major natural resource, crude oil.
Disclosure: A family trust holds substantial quantities of Chevron stock.
Lagos may seal Chevron headquarters over alleged N4.2 billion tax evasion
The Corporate Headquarters of the American multi-national oil company, Chevron Nigeria Limited in Lagos may be shut and its senior officials arrested by the Lagos State Government over tax liability amounting to N4.2 billion.
The coast appears clear for the action, following the striking out of a suit instituted by the management of Chevron at a Federal High Court against the Attorney-General of Lagos State, Lagos State Board of Internal Revenue and the Economic and Financial Crimes Commission (EFCC), claiming that its fundamental rights to acquire and own property and to fair hearing were being infringed upon.
The state government had served demand notice of N4.2 billion on Chevron as tax deductible from its Employee Home Ownership Scheme introduced in 1996.
The state sought the assistance of the EFCC when it became apparent that Chevron was unwilling to pay the said amount.
However, on September 30, 2004, Chevron went to the Federal High Court, Lagos, seeking, among others, the enforcement of the fundamental right to fair hearing and the enforcement of its fundamental right to acquire and own immovable property anywhere in Nigeria as guaranteed by the 1999 Constitution.
Among the reliefs sought by the company were that the payments made under the scheme were loan, which matured with a gratuity supplement as a retirement benefit of the employees as such, no tax deduction was liable to be made under the personal income Act 1993.
The company also said that Lagos did not make use of the machinery set up for redress by an aggrieved tax payer by the Personal Income Tax Act 1993, and instead sought the intervention of EFFC.
“The provisions of the Personal Income Tax Act 1993 are outside the purview of the Economic and Financial Crimes Commission Act 2004,” it said.
It also called the attention of the court to the fact that its premises and head office are in jeopardy and senior staff under threat of arrest.
But Lagos State Government, through its counsel, Ade Ipaye, argued that payment under the scheme is a grant rather than a loan and therefore is subject to tax under the Personal Income Tax Act 1993.
It accused the company of concealment of facts, non-disclosure of information and tax evasion. The state also claimed that Chevron’s action could not be brought or maintained under the Fundamental Rights Enforcement Rules.
It also claimed that Chevron’s action was frivolous, embarrassing and an abuse of court process.
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