Former NLNG boss is not happy with removal of Pioneer Status

The former Managing Director of the Nigerian Liquefied Natural Gas Limited (NLNF), Mr. Godswill Ihetu has weighted in on the controversial Pioneer Tax incentives available to corporates in Nigeria. According to him, the removal of the tax incentives for NLNG resulted in them paying about $4.1 billion in taxes that they should have spent on investments.

“The Guarantees and Assurances stipulate that NLNG will enjoy a pioneer status for some time. By this, NLNG would be excluded from paying taxes for years. The idea was applauded by the NLNG shareholders namely the Nigerian National Petroleum Corporation (NNPC), Shell Petroleum Development Company (SPDC), Total Upstream Nigeria Limited and Nigeria Agip Oil Company. NLNG was not paying taxes until 2011, when the pioneer status granted it was removed by the Federal Government……This implies that the pioneer status given to the NLNG has changed coupled with the fact that a sizeable portion of the firm’s revenue would now be devoted to taxes. Though the responsibility to make and change the laws of a nation lies with the government, the government needs to take into considerations sensitive roles played by some sectors of the economy.

Several controversies have trailed the Pioneer Status since its inception, one of it being the possible loss of revenue to the Federal Government especially as it seemed that the most successful companies were the ones getting the privilege. The Nigerian Liquefied and Natural Gas (NLNG) Limited was one of the initial beneficiaries of the arrangement for being the first to start processing gas for domestic and export markets, but was later stripped of it in 2011.

According to NLNG, between then and 2017, the company has paid about $4.1 billion in taxes to the Federal Government. The annual breakdown of the figures are as follows.


2011- $65.080 million

2012- $107.037 million

2013- $118.5 million

2014- $1.4 billion

2015- $2.1 billion

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2016- $323.2 million

These figures were reeled out by former Managing Director, Mr. Godswill Ihetu, in an interview with The Nation.


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