The Nigerian oil and gas industry owes the Federal Government N600 billion in back taxes, royalties, fines, and commissions that were found in the audit report of the Nigeria Extractive Industries Transparency Initiative (NEITI).
According to information presented in Abuja on Friday and taken from the NEITI audit report, the 77 oil companies implicated had a total liability of N2.6 trillion as of 2019.
The firms were summoned by the House of Representatives in an effort to recover the monies, and it was reported that following the legislators’ intervention, the firms started the process of remitting part of the funds.
The total recovery pre-2021 and before the pronouncement of NEITI was N900bn, the additional amount recovered after NEITI’s pronouncement/National Assembly review was N600bn.
NEITI conducts a financial, physical and process audit that assesses and reconciles physical and financial flows within Nigeria’s oil and gas industry in line with the EITI Standard and the NEITI Act 2007. The oil and gas audit has the objective of confirming the outstanding payments (liabilities) due to the federation from each covered company through the respective revenue collection government agencies.
The management of NEITI had repeatedly expressed concern about the liabilities highlighted in its various reports considering the high demand for government revenue for development projects. The House of Representatives during a plenary session, noted the statement by NEITI that 77 oil and gas companies operating in Nigeria were owing the Federal Government over N2.6tn.
The House had also noted that the debts accrued from the failure of the firms to remit Petroleum Profit Tax, Company Income Tax, Education Tax, Value Added Tax, Withholding Tax, Royalties, penalties and concession on rentals to the Federal Government. The Executive Secretary, NEITI, Orji Ogbonnaya-Orji, said it was the duty of the agency to make data on the country’s extractive industries available to the government.
He also stated that the audit report of the oil industry for 2021 would be ready before the end of this year, adding that it would further provide updates on the remittances so far made by the oil firms to the Federal Government.
Ogbonnaya-Orji said, “The 2021 (oil and gas sector) report will be concluded and published before the end of the year. The scope of the report is to establish what companies paid to the government within the given year of 2021 and how much of that money did government received.
“We equally want to establish if those companies paid what they should pay and if the government received what it should receive, as well as the variances if any.
“We want to establish the quantity of crude that is produced, how much of that can be accounted for, and how much was stolen. We should establish the amount that was exported, reserved for local consumption and how was this reserved one managed.”
