FG Appeals to Gov Adeleke for Resolution of $1.9m Tax Dispute with Mining Companies

The Federal Government of Nigeria has intervened in a major tax dispute involving the Osun State Government and Segilola Resources Operating Limited (SROL), a subsidiary of Thor Explorations Limited.

The conflict, which centers on allegations of unethical business practices and tax evasion amounting to approximately $1.9 million, has prompted the Federal Government to establish a committee aimed at resolving the issue.

According to a statement by Dr. Dele Alake, the Minister of Solid Minerals Development, the committee is chaired by Dr. Mary Ogbe, the Permanent Secretary of the ministry. It includes representatives from the Federal Inland Revenue Service, the Ministry of Labour and Employment, and the National Association of Chambers of Commerce, Industry, Mines and Agriculture. The committee's primary objective is to engage both parties in dialogue to amicably resolve the dispute and restore industrial harmony.

The Osun State Government had previously taken action by sealing the business premises of SROL on September 30, following a court order that permitted the confiscation of the company due to various tax violations and operational issues. This move underscores the state's stance on enforcing compliance with tax regulations.

Dr. Alake emphasized the potential negative impact of such closures on foreign direct investment (FDI) and existing business operations. He stated, "Indiscriminate closures of mining operations by sub-nationals raise the risk of discouraging foreign direct investments and even worse, possible divestment by existing companies."

He further noted that mining is on the exclusive legislative list, suggesting that the Ministry of Solid Minerals should be consulted before any disruptive actions are taken.

The Federal Government's intervention highlights the delicate balance between local governance and national economic interests within Nigeria's mining sector. Dr. Alake urged both Governor Ademola Adeleke of Osun and the management of Thor Exploration Limited to prioritize peace and industrial harmony, considering the potential adverse effects on workers and their dependents due to the closure of operations.