77 oil firms owe FG N2.6trn from tax evasion, concession on rentals- NEITI
The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that 77 oil and gas firms operating in Nigeria currently owe the sum of N2.659 trillion to the federal government, through evasion of petroleum profit tax, company income tax, education tax, value added tax, withholding tax, royalty and concession on rentals.
Orji Ogbonnaya Orji, Executive Secretary, NEITI, disclosed this during the agency’s mid-year briefing in Abuja on Tuesday.
According to him, findings contained in the the Agency’s 2019 audit reports of the oil and gas sector show that oil and gas companies in Nigeria owe government about $6.48 billion which equals about N2.659Trillion with an exchange rate of N410.35.
Orji explained that $143.99million of the total sum is owed as petroleum profit taxes, $1.089billion as company income taxes and $201.69Million as education tax.
“Others include $18.46Million and £972Thousand as Value Added Tax, $23.91million and £997Thousand as Withholding Tax, $4.357billion as royalty oil, $292.44Million as royalty gas, while $270.187Million and $41.86Million were unremitted gas flare penalties and concession rentals respectively,” he said.
According to Orji, the disclosure became imperative following the current financial need of the government to address citizens’ demand for steady power, access to good roads, quality education, fight insurgency and creation of job opportunities for the country’s teeming youth.
“In 2021, if the money is recovered the 2.659trillion could fund about 46 percent of Nigeria’s 2021 budget deficit of N5.6Trillion and is even higher than the entire projected oil revenue for 2021. This is why NEITI is set to work with the government to provide relevant information and data to support efforts at recovering this money.
“The disclosure of this information is in line with NEITI’s mandate to conduct audits, disseminate the findings to the public to enable the citizen’s especially the media and civil society to use the information and data to hold government, companies and even society to account. It is important that the process of recovering this humongous sum be set on course to support government in this period of dwindling revenues.
“We therefore appeal to these companies to ensure that they remit the various outstanding sums against them before the conclusion of the 2020 NEITI audit cycle to the relevant government agencies responsible for collection and remittances of such revenue,” he said.
Speaking further, Orji stressed that the Agency will no longer watch in silence while debts continue to remain in its reports unaddressed.
He disclosed plans to collaborate with relevant agencies to ensure that the monies are recovered.
In his remark, Olusegun Adekunle, Chairman of the Board, said that to effectively undertake the task of ensuring prudent management of extractive resources, there is need for effective oversight of the implementation of the EITI standard by all relevant frontline agencies of government and companies.