Nigeria Loses $3.3billion From Tax Breaks Granted IOCs

Nigeria has lost about $3.3 billion to extraordinary tax breaks granted by the government to some of the world’s biggest oil and gas companies.

The companies include Shell, Total and ENI, which form part of the Nigeria Liquified Natural Gas (NLNG) consortium. The tax break started in 1999.

The NLNG Act grants a 10-year tax holiday making the company exempt from all corporate tax payments for the first ten years of operation.

According to ActionAid, the NLNG Act makes the consortium the only company in Nigeria with its own law defining its tax framework, also exempts the consortium from other taxes.

The Country Director of ActionAid Nigeria, Ojobo Atuluku, disclosed this during yesterday the launch of the report ‘Leaking Revenue: How a big tax break to European gas companies has cost Nigeria billions’ in Abuja.

Atuluku said: “that amount is the equivalent of twice our national education budget and thrice the healthcare budget for 2015.

“This calls for serious concern in a country where over 20 million children do not go to school and almost 15 out of one hundred children die before their fifth birthday”, she said.

ActionAid researches from 2013, she said, “show that the tax incentives cost developing countries at least $138 billion every year, part of which is an estimated amount of $2.9 billion, or a whopping N577 billion Nigeria forfeits every year as a result of tax incentives.”