Petroleum Industry Act, 2021 (PIA) PDF - Fiscal Framework Part IX

A 308 2021 No. 6 Petroleum Industry Act, 2021 (3) A relief shall not be given under this section in respect of an error or mistake as to the basis on which the liability of the applicant ought to have been computed where the accounts, particulars or information was in fact made or given on the ba...

A 308 2021 No. 6 Petroleum Industry Act, 2021 (3) A relief shall not be given under this section in respect of an error or mistake as to the basis on which the liability of the applicant ought to have been computed where the accounts, particulars or information was in fact made or given on the basis or in accordance with the practice of the Service generally prevailing at the time when the accounts, particulars or information was made or given. (4) In determining any application under this section, the Service shall have regard to all the relevant circumstances of the case and in particular shall consider whether the granting of relief would result in the exclusion from charge to tax of any part of the chargeable profits of the applicant and for this purpose, the Service may take into consideration the liability of the applicant and assessments made upon him in respect of other years. Repayment of tax. 296.—(1) Except as otherwise expressly provided in this Act, a claim for the repayment of any hydrocarbon tax overpaid shall not be allowed unless it is made in writing within six years next after the end of the accounting period to which it relates. (2) The Service shall cause to be refunded or set-off at the option of the applicant upon presentation of relevant documents evidencing the tax to be refunded. (3) Any tax claimed based on this section, which is proven not to be due, shall attract a penalty at the prevailing LIBOR or any other successor rate plus 10% from the date the payment or set-off was made up to the date the refund is made by the applicant. PART IX—OFFENCES AND PENALTIES Penalty for defaults. 297.—(1) A person who fails to comply with the provisions of this Chapter or any regulation made under this Act for which no other penalty is specifically provided, shall be liable to an administrative penalty of N10,000,000, and where the default continues beyond a period stipulated by this Act or regulation, the person shall be liable to a further administrative penalty of N2,000,000 or such other sum as may by order be prescribed by the Minister of Finance, for each day the default continues. (2) Notwithstanding the provisions of subsection (1), a person who is found guilty of an offence under this Chapter or in a regulation made under this Act for which no other penalty is specifically provided, shall, on conviction, be liable to a fine of N20,000,000 or other sum as may be prescribed by the Minister of Finance by an order and where the offence continues beyond a period stipulated by this Act or regulation, the person shall be liable to an Petroleum Industry Act, 2021 2021 No. 6 A 309 additional fine of N2,000,000 or such other sum as may, by order, be prescribed by the Minister of Finance for each day the default continues, or imprisonment for a term of six months. (3) A person who— (a) fails to comply with the requirements of a notice served on him under this Chapter ; (b) fails to comply with section 277 of this Act, (c) without sufficient cause fails to attend in answer to a notice or summons served on him under this Chapter or having attended fails to answer any question lawfully put to him, or (d) fails to submit any return required to be submitted under section 277 or 281 of this Act, commits an offence. (4) Any violation in respect of which a penalty is provided for in subsection (1) shall be deemed to occur in Nigeria. 298.—(1) A person who without reasonable excuse— (a) makes up or causes to be made up any incorrect accounts by omitting or understating any profits or overstating any losses of which he is required under this Act to make up accounts, (b) prepares or causes to be prepared any incorrect schedule or statement required to be prepared under section 277 of this Act by overstating any expenditure or overstating any royalties or other sums or by omitting or understating any amounts repaid, refunded, waived or released, or (c) gives or causes to be given any false or misleading information in relation to any matter or thing affecting his liability to hydrocarbon tax, is liable to an administrative penalty of the sum of N15,000,000 or 1% of the amount of tax which has been undercharged in consequence of such incorrect account, schedule, statement or information or would have been so undercharged if the account, schedule, statement or information had been accepted as correct, and is also liable for the appropriate tax which would have been charged. (2) Notwithstanding the provisions of subsection (1) (c), a person who gives or causes to be given any false or misleading information in relation to any matter or thing affecting his liability to hydrocarbon tax, commits an offence and on conviction is liable to a fine of N15,000,000 or 1% of the amount of tax which has been undercharged in consequence of such incorrect account, schedule, statement or information, or would have been so undercharged if the account, Penalty for making incorrect accounts. A 310 2021 No. 6 Petroleum Industry Act, 2021 schedule, statement or information had been accepted as correct and is also liable for the appropriate tax which would have been charged. (3) The Service may compound any offence under this Act by accepting a sum of money not exceeding the maximum fine specified for the offence and shall issue an official receipt for any money so received. False statements and returns. 299.—(1) A person who— (a) for the purpose of obtaining any deduction, refund, rebate, reduction or repayment in respect of hydrocarbon tax for himself or for any other person or who in any return, account, particulars or statement made or furnished with reference to tax, knowingly makes any false statement or false representation or forges or fraudulently alters or uses or fraudulently lends or allows to be used by any other person any receipt or token as evidence for payment of the tax under this Act ; or (b) aids, abets, assists, counsels, incites or induces any other person— (i) to make or deliver any false return or statement under this Act, (ii) to keep or prepare any false accounts or particulars affecting tax, or (iii) unlawfully refuses or neglects to pay tax, commits an offence and is liable on conviction to a fine of N15,000,000 or 1% of the amount of tax for which the person assessable is liable under this Act for the accounting period in respect of or during which the offence was committed, or to imprisonment for six months or to both the fine and imprisonment and is also liable for the appropriate hydrocarbon tax which would have been assessed and charged. (2) Notwithstanding the provisions of subsection (1), any person who does any of the acts or makes the omissions contained in subsection (1), may be liable to an administrative penalty of N15,000,000 or 1% of the amount of hydrocarbon tax for which the person assessable is liable under this Act for the accounting period in respect of or during which the act or omission occurred and shall still be liable for appropriate tax which would have been assessed and charged. Penalties for offences by authorised or unauthorised persons. 300. A person who,— (a) being a member of the Service charged with the administration of this Act or any assistant employed in connection with the assessment and collection of the hydrocarbon tax who— (i) demands from any person an amount in excess of the authorised assessment of the tax payable, (ii) withholds for his own use or otherwise any portion of the amount of tax collected, Petroleum Industry Act, 2021 2021 No. 6 A 311 (iii) renders a false return, whether verbal or in writing of the amounts of tax collected or received by him, or (iv) defrauds any person, embezzles any money or otherwise uses his position to deal wrongfully with the Service or any other individual; or (b) not being authorised under this Act, collects or attempts to collect the tax under this Act, commits an offence and is liable on conviction to a fine equivalent to 200% of the sum in question or to imprisonment for a term not exceeding three years or to both such fine and imprisonment. 301. The institution of proceedings for or the imposition of a penalty, fine or term of imprisonment under this Act shall not relieve any person of liability to payment of any hydrocarbon tax for which he is or may become liable. Tax to be payable notwithstanding any proceedings for penalties. PART X—APPLICATION OF COMPANIES INCOME TAX TO PETROLEUM OPERATIONS 302. (1) Without prejudice to Companies Income Tax Act and any other applicable law, the provisions of this Act shall apply and any company, concessionaire, licensee, lessee, contractor or subcontractor involved in the upstream, midstream or downstream petroleum operations under this Act, shall also be subject to the Companies Income Tax Act. (2) For the purpose of determining the value of chargeable crude oil, or chargeable gas, in relation to any accounting period, the crude oil and gas revenue of a company for that period shall be the value of any chargeable oil or chargeable gas adjusted to the measurement points, based on the— (a) proceeds of all chargeable oil or gas sold by the company ; and (b) value of all chargeable oil or gas disposed by the company. (3) Subject to sections 142 (2) and 197 (2) of this Act, a person intending to be involved in more than one stream, that is upstream, midstream or downstream petroleum operations shall register and use a separate company for each stream of petroleum operations under this Act provided that, for companies with petroleum mining leases selected under section 93 (6) (b) and (7) (b) of this Act, no stamp duties and capital gains tax shall be levied by Government on such segregation. (4) For strategic projects in the upstream petroleum operations that seek to produce oil and natural gas to be processed or refined to finished petroleum products, and supplied in wholesale solely to the domestic market, such projects shall have the option to be established as an integrated strategic project (ISP), whereby the capital investment in the associated midstream petroleum General requirement of companies engaged in petroleum operations to pay companies income tax. Cap. C21, LFN, 2004.