The indebtedness of 77 oil and gas companies across the nation to the Federal Government hit N2.66trillion.
This was disclosed by the Nigeria Extractive Industries Transparency Initiative (NEITI) on Tuesday through its Executive Secretary, Orji Ogbonnaya-Orji, in Abuja.
According to him, NEITI would publish a fresh list of indebted oil firms that it would give anti-corruption agencies including the Economic and Financial Crimes Commission (EFCC) to go after the defaulting organisations.
What NEITI is saying about the debt
Ogbonnaya-Orji explained that the N2.66 trillion debt arose from failure to remit petroleum profit tax, company income tax, education tax, value added tax, withholding tax, royalty and concession on rentals.
He explained that the total liabilities of the 77 companies were captured in the agencies’ 2019 independent audit report of the oil and gas sector.
He said, “The NEITI reports based on findings in its 2019 audit of the oil and gas sector show that oil and gas companies in Nigeria owe government about $6.48billion, which equals N2.66trillion at today’s exchange rate of N410.35.
“A breakdown of the figures shows that a total of $143.99million is owed as petroleum profit taxes, $1.089billion as company income taxes and $201.69million as education tax. Others include $18.46million and £972,000 as Value Added Tax, $23.91million and £997,000 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.”
Why it matters
The NEITI boss said the disclosure was important in view of the government’s current search for revenue to address the demand for steady power, good roads, quality education, fight against insurgency and job creation.
“A comparative analysis of what this huge sum of N2.66trillion can contribute to economic development shows that it could have covered the entire capital budget of the Federal Government in 2020 or even be used to service the Federal Government’s debt of $2.68billion in 2020. In 2021, if the money is recovered the N2.66trillion could fund about 46% of Nigeria’s 2021 budget deficit of N5.6trillion and is even higher than the entire projected oil revenue for 2021,” he said.
He said that NEITI had decided to work with the government to provide relevant information and data to support efforts at recovering this money.
“We therefore, appeal to these 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,” he stated.
The transparency agency boss cautioned oil firms that NEITI would no longer watch while these debts continued to remain in its reports unaddressed.
He stressed that NEITI would provide all necessary information and data to sister agencies and anti-corruption organisations whose responsibilities were to recover the debts into government coffers.