Just when the federal government of Nigeria is waking up to the realities of harnessing the full potentials of taxation due to the falling fortunes from crude oil, a recent report by the Nigeria Extractive Industries Transparency Initiative, NEITI has indicated that the central government as a matter of urgency needs to focus on plunging all loopholes in the tax administration.
The report has it that about 77 companies in the oil and gas sector as a result of failure to remit different taxes payable are indebted to the federal government, reaching a tune of ₦2.743 trillion.
Breakdown of taxes unremitted
This debt of a whopping ₦2.743 trillion is an aftermath of the failure to remit Petroleum Profit Tax, Company Income Tax, Education Tax, Value-Added Tax, Withholding Tax, Royalty, and Concession on Rentals
According to the agency’s report as signed by its Executive Secretary, Dr. Orji Ogbonnaya , the figures show that a total of $143.99million is owed as petroleum profit taxes, $1.089billion as Company Income Taxes, and $201.69Million as Education Tax.
Taxmobile.Online gathered that others include $18.46Million and £972Thousand as Value Added Tax, $23.91million and £997Thousand as Withholding Tax, $4.357billion as Royalty Oil, $292.44Million as Royalty Gas, while $270.187Million and $41.86Million were unremitted gas flare penalties and concession rentals respectively.
Trajectory of report
The report is on the heels of NEITI’s 2019 independent report audit of the oil and gas sector. The 2019 audit discovered that companies in the oil and gas sector owe about $6.48billion which is equivalent to the sum of about ₦2.743 trillion considering today’s exchange rate of ₦413. 73 to a dollar.
- This indicates that the central government is bleeding as these funds could be used to provide power, good roads, quality education, tackle insecurity, and in essence, create jobs for the teeming youths.
- A comparative analysis of what this huge sum of ₦2.743 of debt translate to is the entire capital budget of the federal government in 2020.
- On the flip side, it could also be used to service part of the federal government’s debt of $2.68billion in 2020.