- NLNG Pays $4.1b Taxes to Govt
The Nigerian Liquefied and Natural Gas (NLNG) Limited has, in the past six years, paid $4.1billion in taxes, including Company Income of Tax (CIT), to the Federal Government.
The firm paid the amount between 2011 and 2017, following the decision of the Federal Government to remove the pioneer status it granted the company. Pioneer status empowers the NLNG, being the first to start processing gas for domestic and export markets, not to pay taxes for some time.
Data from the NLNG shows that the company paid $65.080 million in 2011; $107.037 million in 2012; $118.5 milliion in 2013; $1.4 billion in 2014; $2.1 billion in 2015 and $323.2 million in 2016.
Its former Managing Director, Mr. Godswill Ihetu said NLNG would have saved $4.1billion and spent it on importation of heavy-duty equipment, among other needs.
He noted that the military regime of Gen Muhammadu Buhari, promulgated a decree, which culminated in the pioneer status, that the government granted NLNG. He said the decree, among other things, ensured that an inter-ministerial committee was set up to provide direction to NLNG.
He said the committee drafted what is known as “Guarantees and Assurances programmes” for the growth of the NLNG.
Ihetu said: “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.”
According to him, the decision by the Federal Government to remove the pioneer status from NLNG and further made it to pay Corporate Income Tax to the government, was not in the best interest of the company, which has contributed huge revenue to the government’s coffers, after oil.
Ihetu said: “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.
On NLNG’s Act amendment, Ihetu said amending the Act was not only wrong, but would send wrong signals to foreign investors.
He said foreign investors would believe that the government could toy with laws anytime, and as such would not have confidence in the country. He said NLNG would be paying less to its stakeholders, if the amendment sails through at the Senate.