Despite tax playing a major impact on the country’s Internally Generated Revenue in 2020, the company income tax paid by oil and gas companies to the Federal Government fell by ₦4.94bn or 10.25 percent in 2020.
Taxmobile.Online findings from data recently released by the National Bureau of Statistics showed that companies producing crude oil and gas in the country paid ₦47.74bn in corporate tax last year, down from ₦52.68bn in 2019. The company income tax paid by oil producers fell to ₦40.77bn from ₦45.7bn while the amount of taxes paid by gas-producing companies dropped to ₦6.97bn from ₦6.98bn.
The above is according to the National Bureau of Statistics, NBS data. The NBS has more,
Companies operating with a concession or licence in the oil sector are liable to pay royalties, petroleum profit tax, and corporate income tax, according to the Nigeria Extractives Industry Transparency Initiative.
The Federal Government generated a total of ₦1.41tn as CIT last year, with oil and gas companies accounting for 3.39 percent.
Oil producers paid N9.44bn as CIT in the first quarter of 2020; N8.56bn in Q2; N11.69bn in Q3, and N11.08bn in Q4, while gas producers paid N914.09m, N655.54m, N4.76bn and N639.15 in the four quarters.
The tax oil lifted by the Nigerian National Petroleum Corporation on behalf of the Federal Inland Revenue Service plunged to 948,192 barrels in July from a high of 5.28 million in February, before the pandemic hit the oil sector.
The nation’s oil and gas production structure is majorly split between joint ventures onshore and in shallow water with private companies and PSC in deepwater offshore, to which many IOCs have shifted their focus in recent years.
According to the report, federation crude oil and gas lifting are broadly classified into equity export and domestic crude oil, both of which are lifted and marketed by the NNPC and the proceeds remitted into the Federation Account.
“NNPC also lifts crude oil and gas other than equity and domestic crude oil on behalf of DPR (Department of Petroleum Resources) and FIRS, proceeds of which are remitted into Federation Account,” the corporation said.
The NBS also in its latest quarterly report on CIT, said the sum of N295.72bn was generated as CIT in Q4 2020 as against N416.01bn generated in Q3.
It said professional services, including telecoms, generated the highest amount of CIT with N32.17bn generated while the textile and garment industry generated the least.