NEITI helps recover N2.6tr tax after years of lack of law enforcement
By Jeph Ajobaju, Chief Copy Editor
Up to N2.6 trillion tax has been recovered from oil firms through the efforts of the Nigeria Extractive Industries Transparency Initiative (NEITI), after years of dithering over regulation enforcement that has contributed to national debt.
NEITI Executive Secretary Orji Ogbonnaya Orji disclosed the tax haul in Abuja at a Civil Society Organisations (CSO) and media engagement on Extractive Industries Transparency Initiative (EITI) validation.
The revenue includes all taxes, Value Added Tax (VAT) collected by the Federal Inland Revenue Service (FIRS), and all royalties collected by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).
Another $2.6 billion tax as of March 2022 is outstanding with oil firms, he said.
EITI validation is conducted every three years and is a quality assurance mechanism to ascertain the level of compliance and progress in implementing standards among member countries, including Nigeria.
“By the time we release the 2021 report, if any company is owing Nigeria we will have no choice than to invite the EFCC to take over and handle it as an economic crime,” Orji warned.
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Why some oil firms hurried to pay up
Orji referred to the 2019 NEITI report which listed 77 oil and gas firms owing $6.8 billion in taxes, saying the partial recovery is the result of the appearance of NEITI at the National Assembly (NASS) to defend its position based on data it provided.
As soon as NEITI released its 2020 report, he recounted, oil firms that wanted their names protected rushed to pay up and the list reduced from 77 to 51 and the amount came down to $3.6 billion, per Nairametrics.
“Which shows that from the point we released that information a lot of money came in. None of them disputed our report, rather they were giving excuses why they did not pay.
“The money includes all taxes and VAT being collected by the Federal Inland Revenue Service (FIRS) and all royalties being collected by the Nigeria Upstream Petroleum Regulatory Commission (NUPRC).
“NEITI collects nothing, all we are asking is for us to be recognised and offered thank you.”
Backstory
Orji disclosed in September 2021 that 77 oil and gas companies owed N2.659 trillion as Nigeria grapples with revenue shortfall and borrows to finance huge budget deficits with debt service costing 98 per cent of revenue.
He said when converted to foreign exchange (forex) the sum owed is $6.48 billion at the official exchange rate of N410.35 per dollar.
He broke down the figures as follows:
- Petroleum profit tax – $143.99 million
- Company income tax – $1.089 billion
- Education tax – $201.69 million
- VAT – $18.46 million and £972,000
- Withholding tax – $23.91 million and £997,000
- Royalty tax – $4.357 billion
- Royalty gas – $292.44 million
- Gas flare penalties – $270.187 million
- Concession rentals – $41.86 million
President Muhammadu Buhari in October 2021 granted approval to NEITI, the Nigerian Financial Intelligence Unit (NFIU), Independent Corrupt Practices and Other Related Offences Commission (ICPC), Economic and Financial Crimes Commission (EFCC), and other graft busters to recover taxes owed by the 77 oil firms.