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Oil Libya Ltd was ordered last week to pay 210 million Br in back taxes

Tigrai Online
May 03 2011

Tigrai Online - Shell LogoOil Libya Ltd was ordered last week to pay 210 million Br in back taxes for the purchase of shares from Shell Ethiopia Ltd, to the Ethiopian Revenues and Customs Authority (ERCA).

Shell Ethiopia, which was established pursuant to the United Kingdom (UK) Companies Act, was engaged in the distribution of petroleum products in Ethiopia since 1948. Shell Petroleum, a London based company, was the major shareholder with 587,813 of the company’s total 587,817 shares.

Shareholders of Shell Ethiopia passed a resolution on November 14, 2008, to sell all its shares to Libya Oil for an amount they claimed was 99 million Br.

Libya Oil, owned by the Libyan government and registered in Mauritius, became operational in Ethiopia upon acquiring the shares of Shell Ethiopia on May 20, 2009.

Libya Oil had a registered capital of 60.1 million Br at the time, according to the data from the former Ministry of Trade and Industry (MoT).

Upon receiving the payment of seven million Br for capital gain tax dues from Shell Ethiopia following the share transfer, the ERCA issued a tax clearance certificate to the company.

However, in August 2010, the ERCA was approached by a Libya Oil employee claiming that the tax authority had been intentionally defrauded over the transfer of the shares between the companies to avoid paying taxes, according to sources inside the ERCA.

Subsequently, an investigation was launched into the matter by the authority which ended in England, according to sources inside the authority who were not authorised to comment.

Information was obtained from Her Majesty’s Revenues and Customs (HMRC) and authenticated by the Ethiopian Embassy in London that Oil Libya acquired the downstream operations and assets of Shell in Africa for 323.4 billion Br, according to a senior official at the ERCA.

Source - Addis Fortune, Read More