Economy News

77 Oil Companies Owing FG N2.6trn – NEITI

77 Oil Companies Owing FG N2.6trn – NEITI
  • PublishedSeptember 28, 2021

The executive secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Ogbonnaya Orji, has revealed that 77 oil companies owe the federal government N2.659 trillion.

Addressing a press conference in Abuja on Tuesday, Orji said NEITI’s findings are contained in its 2019 audit reports of the oil and gas sector.

The ES said the sum owed the government could fund 46 percent of Nigeria’s 2021 budget deficit of N5.6 trillion.

According to him, “The NEITI reports based on findings in its 2019 audit reports of the oil and gas sector show that oil and gas companies in Nigeria owe the government about $6.48billion which equals about N2.659 trillion at today’s exchange rate of N410.35.

“Data available to NEITI indicates that 77 companies (including international and Nigerian-owned oil and gas companies) owe these debts which arise from failure to remit petroleum profit tax, company income tax, education tax, value-added tax, withholding tax, royalty and concession on rentals.

“This debt is at a time when the government is borrowing money to fund the provision and upgrade of infrastructure for Nigerians, uplift their standards of living, provide steady power supply and access to good roads, quality healthcare and security.

“A breakdown of the figures shows that a total of $143.99 million is owed as petroleum profit taxes, $1.089 billion as company income taxes and $201.69 million as education tax. Others include $18.46 million and £972,000 as value-added tax, $23.91 million and £997,000 as withholding tax, $4.357 billion as royalty oil, $292.44 million as royalty gas, while $270.187 million and $41.86 million were unremitted gas flare penalties and concession rentals respectively.

“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% of Nigeria’s 2021 budget deficit of N5.6 trillion, and is even higher than the entire projected oil revenue for 2021.”

Orji said that he is “committed to strengthening the powers and functions of the NEITI through an amendment of the NEITI Law enacted in 2007”.

“The amendment is to align the law with EITI emerging issues, the new Petroleum Industry Act and ongoing reforms in the industry,” he added.

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