As Nigeria expands borrowing, 77 oil companies owe govt N2.6 trillion

The debt covers petroleum profit tax, company income tax, education tax, value-added tax, withholding tax, royalty, and concession on rentals.

Seventy-seven international and Nigerian oil and gas companies currently owe the Nigerian government $6.48 billion (over N2.6 trillion), the Executive Secretary of the Nigeria Extractive Industries Transparency Initiative (NEITI), Orji Ogbonnaya, said Tuesday.

He said the debts were a result of the companies’ failure to remit petroleum profit tax, company income tax, education tax, value-added tax, withholding tax, royalty, and concession on rentals. He did not provide the names of the companies.

Speaking at the mid-year review and press briefing on the implementation of the Extractive Industries Transparency Initiative, Mr Ogbonnaya said the figure is based on findings in the NEITI 2019 audit reports of the oil and gas sector.

He said the owed money could be useful at a time the government is borrowing money to fund the 2021 budget. The Buhari administration has borrowed from a variety of sources to fund a budget shortfall of over N5 trillion. The latest are multilateral loans totalling $5 billion and $4 billion raised from the issuance of Eurobond last week.

Debt Details

Mr Ogbonnaya said oil and gas companies owe $143.99 million as petroleum profit taxes, $1.089 billion 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.

“A comparative analysis of what this huge sum can contribute to economic development shows that it could have covered the entire capital budget of the federal government in 2020 or even used to service the federal government’s debt of $2.68billion in 2020. In 2021, the 2.659 trillion could fund about 46 per cent of Nigeria’s 2021 budget deficit of N5.6 trillion and is even higher than the entire projected oil revenue for 2021.

“This is why it is important that the process of recovering this humongous sum be set on course to support the government in this period of dwindling revenue.”

While assuring NEITI is determined to help the government recover this money, he appealed to the 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.

“The NEITI will no longer watch while these debts continue to remain in its reports unaddressed. We will provide all necessary information and data to sister agencies including anti-corruption agencies whose responsibilities are to recover these debts into government coffers.

“NEITI made a commitment that it will ensure that its reports are linked to visible impacts that are measurable. This is one key area where we want to ensure compliance to extant rules on remittances due to the government,” he said.

Source: Premium Times

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