The Tax Appeal Tribunal, Lagos Zone, on Friday ordered Mobil Producing Nigeria Unlimited to pay 83.4 million dollars (N13 billion) education tax to the Federal Inland Revenue Service (FIRS).
The tribunal gave the order while delivering judgment on an appeal filed by the oil company against the FIRS.
Chairman of the five-man tribunal, Mr. Kayode Sofola (SAN), said the amount represented the company’s education tax liability for 2008.
The company had instituted the appeal on May 5, 2011 when FIRS issued with it an education tax liability of 83.4 million dollars for 2008.
The appellant’s counsel, Mr. T. Emuwa, had claimed that the assessment breached an agreement signed by the company with the Federal Government of Nigeria and the Nigerian National Petroleum Corporation (NNPC).
Emuwa said the Memorandum of Understanding (MoU) was first signed in 1986 and renewed in 2000.
He said the 2000 MoU allowed the company to deduct all amounts paid to other agencies from the tax due to the federal and state governments FIRS had through its counsel, Mrs. B.H. Oniyangi, claimed that the 2000 MoU was signed for a three-year term, adding that its validity ended on January 1, 2003.
Oniyangi held that the federal government, through a letter issued by the Department of Petroleum Resources (DPR) on January 17, 2008, also confirmed that the MoU had lapsed.
According to her, the 2000 MoU was replaced by the Petroleum Profits Tax Act (PPTA) which was used to issue the disputed assessment.
Delivering the judgment, Sofola agreed that the said MoU was only for a three-year term, noting that there was no evidence before the panel that it was renewed.