Nigeria Lost $3.3b To Major Oil And Gas Companies

Nigeria Lost $3.3b To Major Oil And Gas Companies. Nigeria has lost in the minimum as much as $3.3 billion as result of a series of extraordinary tax breaks granted by the Nigerian government to some of the world’s biggest oil and gas companies, as reported by THE NATION.

Nigeria Lost $3.3b To Major Oil And Gas Companies

Photo: evaluateenergy.com

The companies include Shell, Total and ENI, which form part of the Nigeria Liquified Natural Gas (NLNG) consortium. The tax break started in 1999. The NLNG Act grants a ten year tax holiday making the company exempt from all corporate tax payments for the first ten years of operation.

According to ActionAid, the NLNG Act makes the consortium the only company in Nigeria with its own law defining its tax framework, also permanently exempts the consortium from a range of other taxes.

The Country Director of ActionAid Nigeria, Ojobo Atuluku disclosed this during the launch of the report “Leaking Revenue: How a big tax break to European gas companies has cost Nigeria billions” in Abuja, Tuesday.

ActionAid researches from 2013, she said, “show that the tax incentives cost developing countries at least $138 billion every year, part of which is an estimated amount of $2.9 billion, or a whopping N577 billion Nigeria forfeits every year as a result of tax incentives.” Adding that much of this fund would have gone into social infrastructure developments.

“There is incontrovertible evidence from researches conducted in many developing nations that corporate profits are soaring, and corporate investments in low income countries had tripled since the 1980s. Yet the corporate tax revenues of the countries where these profits are generated have flat-lined as a percentage of their GDP,” she said.

ActionAid urged multinational companies to be transparent about their finances, including reporting their profits, sales, assets, number of employees and tax payments to governments in each country whee they operate (including taxes not paid due to tax breaks.

In his address, Member of the House of Representatives, Herman Lorwase Hembe, representing Vandeikya/Konshisha Federal Constituency, Benue State called on his colleagues at the National Assembly to exercise caution in the deliberation on the proposed amendments to the Corporate Income Tax which seeks to extend the granting of pioneer status to companies from five to ten years, as this cannot be in the interest of the country at a time when the country is in need of revenue.

Reacting to this development, the federal government it was disclosed has set up a committee to review existing tax incentives to determine those that are not in the interest of the country. This disclosure was made by Mr. Funsho Ayo Fadola, Director, Fiscal Policy, Budget Office at the event.

Fadola also revealed that the committee will start sitting in Abuja given the urgency and importance the minister of finance attaches to the issue of tax incentives.

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