S/N

Paragraph of Bill

Related Sections Cap-P.13    
LFN 2004

Subject Matter  of Cap.P13 LFN 2004

Remarks

Recommen- dations

 1

  Title

Petroleum Profit Tax Act 2004

The Principal Act is known as The Petroleum Profits Tax Act 2004

All references to “Petroleum Profit Tax Act” in the amendment should be substituted with “Petroleum Profits Tax Act”.

  2

      3

  10(A)

“(b) The President may, on the recommendation of the Ministers of Petroleum Resources and Finance with the approval of the Federal Executive Council, make regulations prescribing a regime of tax incentives for the petroleum industry.”

There is a need to ensure that such incentives become information in the public domain.

Insert after the word, “industry”, the following words, “and such regulations shall be published in the official gazette”.

  3

     9

   21(3)

“Where a company carries on petroleum operations by production sharing contract or any similar arrangement in the deep offshore and inland basin as defined under section 18 of the Deep Offshore and Inland Basin Production Sharing Contracts Act, the assessable tax for any accounting year on the profits derived from the contract areas shall be an amount equal to 50 per cent of its chargeable profits from the contract area.

Provided that the Minister of Finance may, on the recommendation of the Service with the approval of the Federal Executive Council, vary the rates specified in this section.

It is considered necessary that  this should be handled by the National Assembly.

The proviso in section 21(3) should be deleted

4

10

22(2)

(2) The investment tax credit applicable to the contract area shall be 50 per cent flat rate of qualifying capital expenditure incurred or recognized in the accounting period except that the Minister may vary the rate with the approval of the Federal Executive Council”.

If it is considered necessary, this should be handled by the National Assembly.

Delete the phrase, “… except that the Minister may vary the rate with the approval of the Federal Executive Council”.

5

14

33(A)

“The Accountant-General of the Federation shall, every month, convene a meeting of operators in the crude oil sector for the purposes of reconciliation of all sales, receipt and taxes in respect of crude oil”

The monthly reconciliation meeting by the Accountant-General of the Federation is an administrative issue.

This should be deleted

6

23

56(1)

Income tax assessable on any company, whether or not an assessment has been made, shall, if the Service so directs, be recoverable from any payment made or to be made by any person to such company.

There is a need to ensure consistency with the provision in S.56(6)

The word “Minister” should be substituted for “Service”.

S/N

Paragraph of Bill

Related Sections Cap-P.13    
LFN 2004

Subject Matter of Cap. P13 LFN 2004

Remarks

Recommen- dations

1

63

At any time after the enactment of this Act, the Minister may by order delete any of the powers or duties specified in the First Schedule or include therein additional powers or duties specified in the First Schedule or include therein additional powers or duties and may do so by amendment of such schedule or by substituting a new Schedule therefor.

There is a need to ensure that the due process of amendment is followed.

Substitute after the word “Minister”, the words, “on the recommendation of the service as approved by Federal Executive Council.”

2

S.56
Subsidiary legislation

Deduction of tax at source from payment due in respect of services and   activities.

The Principal Act would be incomplete without the subsidiary legislation.

This was omitted and should be included

3

30(1)(d)
 & (e)

(d) A statement of other sums, deductible under section 22 of this Act, the liabilities for which were incurred during that period.

(e)   a statement of all amounts repaid, refunded, waived or released to it, as referred to in subsection (5) of section 20 of this Act, during that period; and

What are being referred to are no longer in the law by virtue of Decree No. 30 of 1999.

To be deleted.