The Center for Public Integrity (CIP) accuses the Italian oil company Eni of "tax evasion" in the Coral Sul project for liquefaction of Floating Natural Gas, and calculates that, from this project alone, Mozambique fails to collect about 40 million meticais, equivalent to 5.5% in Personal Income Tax, paid last year by the oil and gas mega-projects in the country.
In this vein, CIP also accuses ENI of failing to comply with its social responsibilities by hiring foreign services, in the case of the company Progeco NeXT.
The IPC report, Tax Taxation in Rovuma Gas: - The perverse practices of the Italian Progeco NeXT Mozambique, a TPC for the Tax Authority and the Government of Mozambique, calls the relationship between Eni and Progeco NeXT Mozambique an "Italian mafia", which, according to the non-governmental organization (NGO), belongs to an Italian citizen, identified as Massimo Botoni.
"Just over 12 months ago, the company won a management contract (PES Mozambique) with one of the Rovuma giants, Italy's Eni," it reads.
The actual contracts for operation in Mozambique were registered in Dubai, a free trade zone, and "companies registered in free trade zones enjoy tax benefits related to their location."
CIP says that Progeco NeXT Mozambique has submitted to Mozambican authorities illicit contracts for its international consultants, stating that each of them receives $1,000, but "the contracts in Dubai range from $12,000 to $15,000 per month and all escape taxation on personal income."
"Progeco NeXT hired the labor requested by Eni, but did not register anyone in Mozambique," the document says.
The contractors come from the UK, the US, Egypt, France and Qatar. They work offshore in the Rovuma Basin for 28 days and then return to their home states for 28 days, as the CIP states.
Italy-based Progeco NeXT provides project management services to Eni in Mozambique under a contract called "Project Management Service".
"Their job is to get the best engineers in the world to do the work," and the CIP avers that "this kind of contract is only given to big companies that have been in the 'oil & gas' business for a while."
The NGO notes that the Director of PES Mozambique, Progeco NeXT in Italy and Dubai is the same citizen, Massimo Bottoni.