The Senate on Thursday issued the Nigeria LNG one week ultimatum to produce all details showing its payments of dividend and other taxes to the Nigerian government since it commenced business.
The lawmakers were angered by a new report by Action Aid Nigeria, a non-governmental organisation, which revealed how Nigeria lost $3.3 billion (about N650.1 billion) in seven years to questionable tax exemption granted by the government.
The report titled: “Leaking Revenue: How a big tax break to European gas companies has cost Nigeria billion” highlighted the loss by the Nigerian government through the contentious pioneer status regime granted the company.
The NLNG was not only exempted from paying 30 per cent corporate income tax (CIT) on its profits for five years between 1999 and 2004, but refused to commence payment after the period of approved exemption lapsed in 2009, until 2012.
The report also indicated that the NLNG has not even paid the $1.15 billion it was supposed to have paid in 2012.
The report said the exemption, which cost the country about $3.2 billion (about N630.4 billion), also covered a range of other taxes, including about $141 million (about N27.8 billion) being two per cent of its profits as education tax earmarked by the government for the advancement of education in Nigeria.
Following the report, the NLNG, through its general manager, External Relations Division, Kudo Eresia-Eke, disputed the figures in the report, pointing out that the initial investment of $2.5billion by the Nigerian government had grown into a $16 billion plant with the tax incentives it received.
Apart from a yield of over $33 billion in the form of dividends, taxes and feed-gas purchases for the country over the past 16 years, Mr. Eresia-Eke said the company realised additional $ 5billion through corporate spend on local goods and services during the same period.
“The company paid $3.6 billion in Company Income Tax and Education Tax between 2014 and 2015. This is in line with NLNG’s corporate vision to help build a better Nigeria,” he added.
He however explained that at the expiration of the tax holiday period, the NLNG did not pay the tax due to the government, because it “did not have taxable profit for the 2010 to 2012 financial years due to unrelieved Capital Allowances on qualifying fixed assets acquired during the pioneer period.”
In August 2015, PREMIUM TIMES investigation had revealed that the Nigerian government earned at least $11.8 billion as dividends from the company between 2004 and 2014.
The NLNG management and the Nigerian National Petroleum Corporation (NNPC), which holds 49 per cent equity in the company on behalf of Nigeria, rebuffed all inquiries by the newspaper on the issue.
But, Mr. Eresia-Eke, in a terse response Friday morning to PREMIUM TIMES’ inquiry on Thursday, confirmed the lawmakers’ request.
“NLNG can confirm that the Senate has requested for the company’s financial reports”, Mr. Eresia-Eke said. “The requested information is contained in the annual report, which we file with the Corporate Affairs Department every year. NLNG remains committed to continuing to conduct its business in accordance with the law and regulations.”