Nigeria lose $3.3bn to foreign oil firms as tax incentives – Report

Oil giants like Shell, Total and Eni are said to have cost Nigeria as much as $3.3 billion in tax revenue as a result of extraordinary tax breaks granted by successive governments.

The tax break which was said to have begun in 1999 had seen companies like Shell, Total and ENI which form part of the Nigeria Liquified Natural Gas (NLNG) consortium befitting from tax holiday.

Ojobo Atuluku, Country Director of ActionAid Nigeria made this disclosure at the launch of a report titled “Leaking Revenue: How a big tax break to Europen gas companies has cost Nigeria billion”

The ActionAid who commences the research from 2013 disclosed that the tax holiday cost developing countries at least $138 billion every year and adding that an estimated $2.9 billion of the amount that Nigeria lost every year as result of tax incentives.

She said: “There is incontrovertible evidence from researches conducted in many developing nations that corporate profits are soaring, and corporate investments in low income countries had tripled since the 1980s. Yet the corporate tax revenues of the countries where these profits are generated have flat-lined as a percentage of their GDP.”

According to Atuluku, the amount is the equivalent of twice Nigeria’s budget for education and thrice the healthcare budget for 2015.

“Women and children suffering as healthcare, schools and other key public services are starved of resources,” while suggesting that if many of these tax incentives are presented, we will be able to improve the lives of women and children with improved availability of health, education and other key public services.

She therefore calls on the National Assembly to review some tax incentives that are inimical to the growth of the economy.

The NLNG Act grants ten year tax incentive which exempts the company from all corporate tax payments for the first ten years of operation. According to investigation, the NLNG ACT makes the consortium the only firm in Nigeria with its own law defining its tax framework and this exempted the consortium from a range of other taxes.