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FG: 77 Oil Firms Owe N2.66tn

*If recovered could fund about 46 per cent of Nigeria’s 2021 budget deficit of N5.6tn

The Nigeria Extractive Industries Transparency Initiative has asserted that 77 oil and gas companies are now indebted to the Federal Government to the tune of N2.66tn.

NEITI’s Executive Secretary, Orji Ogbonnaya-Orji, who said this in Abuja while speaking on the status of EITI implementation in Nigeria on Tuesday, said the 77 firms carried out their operations across the country.

Ogbonnaya-Orji explained that the N2.66tn debt arose from a 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.

In his words, “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 $6.48bn, which equals N2.66tn at today’s exchange rate of N410.35.

“A breakdown of the figures show that a total of $143.99m is owed as petroleum profit taxes, $1.089bn as company income taxes and $201.69m as education tax.

“Others include $18.46m and £972,000 as Value Added Tax, $23.91m and £997,000 as withholding tax, $4.357bn as royalty oil, $292.44m as royalty gas, while $270.187m and $41.86m were unremitted gas flare penalties and concession rentals respectively.”

This disclosure according to the NEITI boss, 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 N2.66tn 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 $2.68bn in 2020,” Ogbonnaya-Orji stated.

He added, “In 2021 if the money is recovered the N2.66tn could fund about 46 per cent of Nigeria’s 2021 budget deficit of N5.6tn and is even higher than the entire projected oil revenue for 2021.”

This, he said, was why 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.

On whether the agency was partnering law enforcement agencies to recover the N2.66tn from the 77 companies, Ogbonnaya-Orji replied in the affirmative.

“We will also share the information and data with our partner anti-corruption agencies with whom we have signed MoUs,” he said.

He explained that in the past seven months, NEITI had held series of meetings and consultations with diverse stakeholder groups involved in the EITI process.

He said, “The outcomes of these engagements have culminated in the signing of Memorandum of Understanding with some of them to support NEITI in the implementation of the EITI in Nigeria.

“MoUs were signed notably with the Economic and Financial Crimes Commission; Independent Corrupt Practices and Other Related Offences Commission; and the Nigerian Financial Intelligence Unit.”

Officials at NEITI stated that the debtor firms had been informed to pay up, while the anti-corruption agencies had been notified about the situation and the need to recover the fund.

When probed further to give some of the names of the debtor companies, Onuorah replied, “No we cannot, because I can give you the name of a company and the company that I gave you its name has paid back.

“This is because they (the companies) know that we are pushing for them to pay back this money. So if I give you the name of a company and it was discovered that the company paid back in July, you know it won’t be right.

“So until the audit report for 2020 is concluded, then we can compile the names of all the outstanding payments again and commence the process of recovery.”

General Secretary, PENGASSAN, Lumumba Okugbawa, argued that it was unfair for oil firms to owe the country such amount at a time when Nigeria was looking for funds to boost the economy, he said “ it is a bad business strategy that you allow people to owe you such an amount at a time when the country is looking for money to fund its budget.”

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