FG urged to recover $7.5bn taxes from IOCs

The Nigeria Extractive Industries Transparency Initiative (NEITI) has called on President Muhammadu Buhari to consider the recovery of over $7.5 billion from oil and gas companies operating in Nigeria as a major priority in his economic policy agenda expected to be unfolded very soon.

The amount represents cases of underpayments, under-assessments of taxes, royalties, rents, among others, revealed by NEITI in its several independent audit reports, which have not been adequately addressed in the past.

The Executive Secretary, Mrs. Zainab Ahmed, made the call in Abuja at an Oil and Gas Conference convened to articulate an agenda for the administration in support of the  proposed oil and gas industry reforms. She explained that at a time when the new administration is in dire need of funds to tackle complex problems facing the nation, recovery of the funds should be pursued vigorously with all political will and seriousness it deserves. Mrs. Ahmed gave the assurance that NEITI was ready and willing to provide every information and data to assist the government to recover the funds.

She also disclosed that a total of $11.6 billion, which represents outstanding total dividends arising from loans and interest repayments from Federal Government’s investment in Liquefied Natural Gas (LNG) also needs to be recovered into government coffers. “Our 2012 Audit Report discovered that total dividend loans and interest repayment from LNG paid to the NNPC in 2012 was $2.8 billion. However, in the course of NEITI’s audit, NNPC was unable to provide any evidence that the funds were remitted to the Federation Account as required by law.

“The total amount received by NNPC from LNG under the same circumstances, which have not been remitted to the Federation Account stands at $11.6 billion.”

Mrs. Ahmed also used the forum to call for full investigation into the transfer of eight oil wells sold by NNPC to the Nigeria Petroleum Development Company (NPDC) in 2010 and 2011.

“The position of NEITI is that the whole transaction is not transparent.”

The Federal Government needs to carry out a full investigation into the sale to ascertain the actual cost of the oil blocks and revenue loss to the federation in the whole transaction.

She used the forum to convey NEITI’s position for the removal of oil subsidy to save the nation from huge revenue loss and embarrassment that the management of the exercise has represented. “It has been the position of NEITI that the oil subsidy regime is a fraud that should not be allowed to stand any longer. The amount spent so far annually is enough to repair the refineries or even build new ones.”

She advised the new administration to provide the necessary political will required for implementation of other findings and recommendations contained in NEITI’s independent reports, which she said are quite comprehensive and insightful to guide the government to reform the sector.

The conference was convened for experts in the oil and gas industry to articulate an advisory agenda that will help the new administration in its plan to reform the oil and gas industry.