Revenue crisis: NEITI Asks 51 Firms To Remit N1.32trn Debt To FG

The Nigeria Extractive Industries Transparency Initiative (NEITI) has asked 51 oil and gas companies to pay the $3.17bn (N1.32trn) debt owed the federal government.

In its 2020 audit report, the agency said that the payment has become imperative as revenue in the year under review dropped by 40 percent.

In the report, NEITI said that the number of defaulting companies dropped from 77 in 2019 to 51 in 2020.

The federal government had in recent times been battling revenue challenges caused by the poor performance of revenue generating agencies.

In the 2020 fiscal period when the money not remitted by the oil and gas firms, the federal government generated the sum of N3.94trn, which represented about 73 per cent of the target for the 2020 fiscal period.

This means that out of the projected revenue target of N5.39trn for 2020, the government could only achieve the sum of N3.94trn thus leaving a revenue shortfall of N1.45trn.

The Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, described the current debts as collectable revenues that are due to the Federation by the Department of Petroleum Resources and the Federal Inland Revenue Service.

The liabilities are royalty oil, royalty gas, concession rentals, Petroleum Profit Tax, Company Income Tax, Education tax, Value Added Tax and Withholding Tax among others.

The NEITI boss said that the oil and gas sector contributed only 8.16 per cent to the total Gross Domestic Product in 2020, which represented a decline of 0.46 per cent when compared to the 8.62 per cent recorded in 2019.

He revealed that the sector dominated the country’s export in 2020, contributing about 75 per cent or N9.44tn of the total export value of N12.52tn.

He said, “The courageous public disclosure of companies’ liabilities to the Federation by NEITI was in line with its national mandate and in fulfilment of its obligation as a member of the global Extractive Industries Transparency Initiative (EITI), and not in any way against the companies.

“NEITI’s disclosure seeks to draw the attention of the oil and gas companies to their obligations to remit all revenues due to government, especially at this time that government is in dire need of revenues to rebuild the nation’s infrastructure and improve the investment climate in the country’.

Orji added, “Without the companies there will be no industry, no investments and no revenues to remit”. So NEITI will continue to support the companies and also expect that they live up to their obligations, as regard to payment of taxes, royalties and levies to the Federation, as they do in other jurisdictions of their operations.
The NEITI 2020 oil and gas report also revealed that Nigeria earned $20.43bn from the oil and gas sector in 2020.
On remittances to the Federation Account from the oil and gas sector, the report disclosed that $14.65bn, representing 71.17 percent of the total earnings in 2020, was remitted to the account, while total aggregate financial flows from the oil and gas sector government in ten years (2011-2020) was $394.029bn.