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How FG lost N1.1tn via waivers, undue tax holidays for oil firms in 2014—NEITI

The principal watchdog in the nation’s oil and gas sector, Nigerian Extractive Industries Transparency Initiative (NEITI) has given tips on how the federal government bled away $2.1 billion (N1.1 trillion) in 2014.

According to the graphic details, NEITI said by granting Pioneer Status, the Federal Government has waived $2.1 billion (N1.1 trillion) to 22 oil companies through tax holiday as at 2014.

Also, these companies are operators in the marginal field segment of the Nigerian oil and gas industry, according to the latest report from the NEITI.

It would be recalled that Pioneer Status (PS) is a tax holiday incentive, designed by the Federal Government and backed by the law granted to targeted industries, products and services, designated as priority areas and growth drivers of the economy.

Experts say these are lost funds by government that would have helped the economy drive away from recession.

NEITI, the revenue watchdog, also shares this view in its 2014 Oil and Gas report, which regarded the tax waivers, as a loss of revenue to the federation, which it noted, would hamper development projects in the economy.

NEITI said pioneer status should not be granted to any company in the oil and gas sector, unless it is evidently clear that the company is actually pioneering an aspect of the industry in the country.

In the executive summary of the report by NEITI, it called for a “Regular review of the pioneer status to discover some of the companies granted tax waivers that had outgrown pioneer status.

“A coordinating desk should be established in the Ministry of Finance for all the agencies that process tax incentives while the final approval for tax waivers should be issued by the Minister of Finance”.