Shell criticized for $1.7 billion tax refund in poverty-stricken Nigeria

ActionAid Nederland is accusing oil-giant shell of unethically accepting a 1.7 billion dollar tax rebate in Nigeria, while 110 million people in the country have less than a dollar to spend a day. The organization wants the Dutch government to confront Shell about these tax exemptions in developing countries, RTL Nieuws reports. "60 percent of Nigerians live on less than a dollar a day. There is increasing criticism on major international companies that make a profit, but do not contribute to the public services in the country where they operate", according to ActionAid. Nigeria offers foreign companies a so-called tax holiday, which means that they have to pay very little tax for a number of years. This is legal according to the countries laws, but unethical according to Action Aid. According to Nigerian rules, Shell was entitled to a tax rebate for 10 years since 1999. Shell also made use of a standard accounting practice known as "deferred tax", according to the organization. An investment company often gets a tax rebate after, for example, purchasing equipment. The deferred tax practice gives Shell permission to use its 10 years of tax advantages not in the first 10 years, but only after all the other rebates have run out. According to the organization, European oil giants Total (France) and Eni (Italy) also make use of this tax advantage. In total the three companies received 3.3 billion euros in refunds between 2005 and 2013.