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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Towards a Definition of 'Petroleum Operations' Under Nigerian Petroleum Taxation Law
Author:Emole, Chijioke E.
Periodical:African Journal of International and Comparative Law
Geographic term:Nigeria
Subjects:fiscal law
Law, Human Rights and Violence
Development and Technology
Economics and Trade
Abstract:The umbrella law that governs petroleum taxation in Nigeria is the Petroleum Profits Tax Act, the interpretation section of which defines 'petroleum operations'. However, the exact meaning of 'petroleum operations' under the Act has generated much legal controversy. The case of Shell Petroleum Development Company (Nigeria) Limited v. Federal Board of Inland Revenue is exemplary in this respect. This case arose out of the refusal of the Nigerian Federal Board of Inland Revenue to allow certain expenses incurred by Shell during its petroleum operations in the 1973 accounting period to be deducted from its profit for the same period, for the purpose of ascertaining the adjusted profit on which tax was to be charged, assessed and payable. The expenses in question concerned exchange losses on payment of petroleum profits tax, commission paid to the Central Bank of Nigeria in connection with payment of petroleum profits tax, and the cost of educational scholarships. In 1996 the Supreme Court held that these expenses were deductible in computing the adjusted profits of Shell for 1973, thereby overturning the decision of the Court of Appeal. The case is significant in that there is now a binding judicial definition of 'petroleum operations' for taxation purposes. Notes, ref.