PIA-2021_Fiscal Framework-Part VI (Applicability Accounts and Particulars).pdf

Petroleum Industry Act, 2021 2021 No. 6 A 297 (2) Any liquidator, receiver or agent under subsection (1) shall be answerable for doing the acts required to be done by virtue of this Act for the assessment and charge to tax of the company and for payment of such tax. (3) A liquidator or receiver u...

Petroleum Industry Act, 2021 2021 No. 6 A 297 (2) Any liquidator, receiver or agent under subsection (1) shall be answerable for doing the acts required to be done by virtue of this Act for the assessment and charge to tax of the company and for payment of such tax. (3) A liquidator or receiver under subsection (1) shall not distribute any asset of the Company to the shareholders or debenture holders unless he has made provision for the payment in full of any tax which may be found payable by the company or by the liquidator, receiver or agent on behalf of the company. 275. Where a company which is or was engaged in petroleum operations transfers a substantial part of its assets to any person without having paid any companies income tax or hydrocarbon tax, assessed or chargeable upon the company, for any accounting period ending prior to such transfer and in the opinion of the Service one reason for such transfer by the company was to avoid payment of such tax then that tax as charged upon the company may be sued for and recovered from that person in a manner similar to a suit for any other tax under section 294 of this Act. Avoidance by transfer. 276. Every person answerable under this Act for the payment of companies income tax or hydrocarbon tax on behalf of a company may retain out of any money in or coming to his hands or within his control on behalf of such company so much as shall be sufficient to pay the tax and shall be indemnified against any person for payments made by him in accordance with this Act. Indemnification of representative. PART VI—APPLICABILITY, ACCOUNTS AND PARTICULARS 277.—(1) Every company engaged in upstream petroleum operations related to crude oil shall for each accounting period of the company make up accounts of its profits or losses and prepare the following particulars for the purpose of determining hydrocarbon tax— (a) a statement of accounts of its profits or losses ; (b) computations of its actual adjusted profit or loss and actual assessable profits of that period ; (c) in connection with the Fifth Schedule to this Act, a schedule showing— (i) the residues at the end of that period in respect of its assets, (ii) all qualifying petroleum expenditure incurred by it in that period, (iii) the values of any of its assets disposed of in that period, and (iv) the allowances due to it under that schedule for that period ; Preparation and delivery of accounts and particulars. Fifth Schedule. A 298 Sixth Schedule. 2021 No. 6 Petroleum Industry Act, 2021 (d) in connection with the Sixth Schedule to this Act, a schedule showing total production allowance from each and every field of its upstream petroleum operations related to crude oil ; (e) a computation of its actual chargeable profits for that period for the two classes of chargeable profits identified in section 267 (a) and (b) of this Act ; (f ) a statement of amounts repaid, refunded, waived or released to it, referred to in section 263 (2) of this Act, during that period ; (g) a computation of its chargeable tax for that period and where associated gas is being sold or otherwise delivered through the measurement point the methodology used to determine the chargeable tax ; (h) duly completed self-assessment form attested to by the principal officer of the company ; and (i) evidence of payment of the final instalment. (2) Every company engaged in upstream petroleum operations related to crude oil shall, with respect to any accounting period of the company and within five months after the expiration of that period or within five months after the effective date of this Act, whichever is later, deliver to the Service a copy of its accounts, bearing an auditor’s certificate, of that period, in accordance with subsection (1) and copies of the particulars referred to in subsection (1) relating to that period with the copy of the delivered company accounts and each copy of those particulars, shall, where the copies are— (a) not estimates, contain a declaration signed by authorised officer of the company or by its liquidator, receiver or the agent of the liquidator or receiver, that the same is true and complete ; and (b) estimates, contain a declaration, similarly signed, that the estimate was made to the best of the ability of the person signing same. (3) Notwithstanding the provisions of this section, every company which is yet to commence bulk sales or disposal of chargeable oil, shall file with the Service its audited accounts and returns— (a) within 18 months from the date of its incorporation, in the case of a newly incorporated company ; and (b) within five months after any period ending on 31st December, in the case of any other company, provided that where there is an interval between 31st December of the preceding year and the date on which the company commences the bulk sale or disposal of chargeable oil, natural gas or condensate, the interval shall be deemed to form part of the preceding period. Petroleum Industry Act, 2021 2021 No. 6 A 299 (4) A company which fails to comply with subsection (2) or (3) is liable to pay as penalty for late filing— (a) N10,000,000 on the first day the failure occurs and N2,000,000 for each and every subsequent day in which the failure continues ; or (b) other sum as may be prescribed by the Minister of Finance by order published in the Federal Government Gazette. 278. The Service may give notice in writing to any company engaged in upstream petroleum operations related to crude oil as the Service may deem necessary requiring the company to furnish further information, within reasonable time as may be specified, in relation to any matter referred to in section 277 of this Act or any other matter which the Service may consider necessary for the purpose of this Act. Power of the Service to request further information. 279.—(1) For the purpose of obtaining information in respect of any company’s upstream petroleum operations related to crude oil, the Service may give notice to a company requiring it within a period not less than 21 days from the date of service of the notice, to complete and deliver to the Service any information called for in such notice and in addition or alternatively requiring an authorised representative of such company or its liquidator, receiver or the agent of such liquidator or receiver, to attend before the Service or its authorised representative on the date or dates as may be specified in the notice and to produce for examination any books, documents, accounts and particulars which the Service may deem necessary. Power to call for returns and books. (2) Where a company assessable to hydrocarbon tax under the provisions of this Act fails or refuses to keep books or accounts which, in the opinion of the Service are adequate for the purpose of ascertaining the tax, the Service may by notice in writing require it to keep such records, books and accounts as the Service considers to be adequate in a form and in a language as the Service may direct and the company shall keep the records, books and accounts as directed. (3) An appeal shall lie from any direction of the Service made under this section to the Tax Appeal Tribunal. 280.—(1) Not later than two months after the commencement of each Returns of accounting period of any company engaged in upstream petroleum operations estimated related to crude oil, the company shall submit to the Service an estimated tax. return of its profits or losses for that accounting period for the purpose of hydrocarbon tax, which shall include— (a) computations of its estimated adjusted profit or loss and of its estimated assessable profits of that period ; A 300 Fifth Schedule. Sixth Schedule. 2021 No. 6 Petroleum Industry Act, 2021 (b) in connection with the Fifth Schedule to this Act, a schedule showing— (i) the estimated residues at the end of that period in respect of its assets, (ii) all estimated qualifying petroleum expenditure incurred by it in that period, (iii) the values of any of its assets, estimated by references to the provisions of that schedule, to be disposed of in that period, and (iv) the allowances due to it under that schedule for that period ; (c) in connection with the Sixth Schedule to this Act, a schedule showing estimated total production allowance from all its upstream petroleum operations related to crude oil on field by field basis ; (d) a computation of its estimated chargeable profits of that period ; and (e) a computation of its estimated tax for that period. (2) Where, at any time during the accounting period, there is a change in price, cost or volume, the company shall submit further returns on a monthly basis containing its revised estimated tax for such period. (3) Where the further returns provided for under subsection (2) is not made, the Service shall impose interest at the prevailing LIBOR or any other successor rate plus 10% points for the differential of the revised tax over the estimated tax paid by the company. (4) Every return made by a company engaged in upstream petroleum operations related to crude oil in fulfilment of the provisions of this section shall be subject to review and validation by the Service. (5) Where a company does not provide the estimates under subsections (1) and (2), the Service shall have the right to determine such estimates on the best of judgment basis and impose same on the company. (6) A company which fails to comply with subsection (1) is liable to pay as penalty for late filing— (a) N10,000,000 on the first day the failure occurs and N2,000,000 for each and every subsequent day in which the failure continues ; or (b) other sum as may be prescribed by the Minister of Finance by order published in the Federal Government Gazette. Petroleum Industry Act, 2021 2021 No. 6 A 301 281. Where it is shown by any company to the satisfaction of the Service that for some good reason, the company is not able to comply with section 277 of this Act within the time limited by that section or any notice given to it under section 278 or 279 of this Act, within the time limited by any such notice, the Service may grant in writing such extension of that time as the Service may consider necessary. Extension of periods for making returns. 282.—(1) The Service shall proceed to assess a company with the hydrocarbon tax for any accounting period of the company immediately after the expiration of the time allowed to such company for the delivery of selfassessment provided for in section 277 of this Act. Assessment of tax payable. (2) Where a company has delivered a self-assessment for any accounting period of the company, the Service may— (a) accept the self-assessment ; or (b) refuse to accept the self-assessment and proceed as provided in subsection (3) upon any failure as mentioned and the like consequences shall ensue. (3) Where, for any accounting period, a company files a self-assessment which was rejected by the Service or has failed to file self-assessment as provided in section 277 of this Act within the time limited by that section or has failed to comply with any notice given to it under section 278 or 279 of this Act within the time specified in such notice or within any extended time provided in section 281 of this Act, and the Service is of the opinion that the company is liable to pay hydrocarbon tax, the Service may estimate the amount of the tax to be paid by the company for that accounting period and make an assessment accordingly, provided that— (a) the assessment shall not affect any liability otherwise incurred by such company by reason of its failure or neglect to deliver the accounts and particulars or to comply with the notices ; and (b) nothing in this subsection shall affect the right of the Service to make any additional assessment under the provisions of section 283 of this Act. 283.—(1) Where the Service discovers or is of the opinion at any time that, with respect to any company liable to hydrocarbon tax, tax has not been charged and assessed upon the company or has been charged and assessed upon the company at an amount less than that which ought to have been assessed and charged for any accounting period of the company, the Service may within six years after the expiration of that accounting period— (a) assess the company, as often as may be necessary, with tax for that accounting period at such amount or additional amount as in the opinion of the Service ought to have been charged and assessed; and Additional assessments. A 302 2021 No. 6 Petroleum Industry Act, 2021 (b) may make any consequential revision of the tax charged or to be charged for any subsequent accounting period of the company. (2) Where a revision under subsection (1) results in a greater amount of tax to be charged than has been charged or would otherwise be charged, an additional assessment or an assessment for any such subsequent accounting period shall be made and the provisions of this Act as to notice of assessment, objection, appeal and other proceedings under this Act shall apply to any such assessment or additional assessment and to the tax charged. (3) For the purpose of computing under subsection (1) the amount or the additional amount of tax for any accounting period of a company which ought to have been charged, all relevant facts consistent with section 289 (4) of this Act shall be taken into account even though it is not known when any previous assessment or additional assessment on the company for that accounting period was made or could have been made. (4) Notwithstanding the provisions of this section, where any form of fraud, willful default or neglect has been committed by or on behalf of any company in connection with hydrocarbon tax imposed under this Act, the Service may, at any time and as often as may be necessary, assess the company on such amount as may be necessary for the purpose of recovering any loss of tax attributable to fraud, willful default or neglect. Making of assessments. 284.—(1) Assessments of hydrocarbon tax shall be made in such form and in such manner as the Service shall authorise and shall contain the— (a) names and addresses of the companies assessed to tax or of the persons in whose names any companies have been assessed to tax, provided that the names of the represented companies are indicated; and (b) particular accounting period and the amount of the chargeable profits and chargeable tax for that period, in the case of each company for each of its accounting periods. (2) When any assessment is to be amended or revised, a form of amended or revised assessment shall be made in a manner similar to that in which the original of that assessment was made under subsection (1) showing the amended or revised amount of the chargeable profits and chargeable tax. (3) A copy of each assessment and of each amended or revised assessment shall be filed in a list which shall constitute the assessment list for the purpose of this Act. Petroleum Industry Act, 2021 2021 No. 6 285.—(1) The Service shall cause to be served personally on or sent by courier to a company which is liable to hydrocarbon tax under this Act, by way of an additional assessment or an assessment by the Service, a notice of assessment stating the— (a) accounting period and the amount of its chargeable profits and chargeable tax assessed and charged upon the company ; (b) place at which payment of the tax should be made ; and (c) rights of the company under subsection (2). (2) Where any person in whose name an assessment was made in accordance with this Act, disputes the assessment, the person may apply to the Service by notice of objection in writing, to review and revise the assessment made on him and the application shall be made within 30 days from the date of service of the notice of the assessment, stating the amount of chargeable— (a) profits of the company of the accounting period in respect of which the assessment is made ; and (b) tax and the tax which such person claims should be stated on the notice of assessment. (3) The Service, upon being satisfied that due to absence from Nigeria, sickness or other reasonable cause, the person in whose name the assessment was made was prevented from making the application within such period of 30 days, shall extend the period as may be reasonable in the circumstances. (4) After receipt of a notice of objection referred to in subsection (2), the Service may within such time and place as it shall specify, require— (a) the person giving the notice of objection to furnish such particulars as the Service may deem necessary ; and (b) any other person, by notice, to give evidence orally or in writing in respect of any matter necessary for the ascertainment of the hydrocarbon tax payable and the Service may further require that where such evidence is given— (i) orally, it shall be given on oath, and (ii) in writing, it shall be given by affidavit. (5) In the event of any person assessed who has objected to an assessment made upon him agreeing with the Service as to the amount of tax liable to be assessed, the assessment shall be amended accordingly and notice of the tax payable shall be served upon the person. (6) Where an applicant for revision under subsection (2) fails to agree with the Service on the amount of the hydrocarbon tax, the Service shall give A 303 Notices of assessment. A 304 2021 No. 6 Petroleum Industry Act, 2021 such applicant notice of refusal to amend the assessment as desired by the applicant or may revise the assessment to such amount as the Service may determine and give the applicant notice of the revised assessment and tax payable, together with notice of refusal to any subsequent request to amend the revision and, where necessary, any reference in this Act to an assessment or additional assessment shall be treated as a reference to an assessment or additional assessment as revised under the provisions of this subsection. Errors and defects in assessment and notice. 286.—(1) An assessment, warrant or other proceeding purporting to be made in accordance with this Act shall not be quashed or deemed to be void or voidable for want of form or be affected by reason of a mistake, defect or omission, if the— (a) substance and effect of the assessment is in conformity with the provisions of this Act ; and (b) company assessed or intended to be assessed or affected is designated according to common intent and understanding. (2) An assessment shall not be invalidated or affected by reason of— (a) a mistake as to the— (i) name of a company liable or of a person in whose name a company is assessed, or (ii) amount of the tax; or (b) any variance between the assessment and the notice, if in cases of assessment, the notice be duly served on the company intended to be assessed or on the person in whose name the assessment was to be made on a company, and such notice contains, in substance and effect, the particulars on which the assessment is made. Tax computation. 287. Notwithstanding anything to the contrary in any law— (a) all hydrocarbon tax computation made under this Act shall be in US Dollars ; and (b) any assessment made under section 284 of this Act shall be in US Dollars. PART VII—APPEALS Appeals to Tax Appeal Tribunal. Act No. 13, 2007. 288. Any Company or tax payer, who does not agree with an assessment made under section 285 (6) of this Act, may appeal against the assessment to the Tax Appeal Tribunal established under the provisions of section 59 of the Federal Inland Revenue Service (Establishment) Act.