By Prince Okafor
THE Extractive Industries Transparency Initiative, EITI has declared its support for the Nigeria Extractive Industries Transparency Initiative, NEITI, targeted at achieving increased transparency and accountability in Nigeria.
In its latest report, EITI indicated that after nearly 50 years of exploration, the oil and gas sector continues to play a significant role in the economy and accounts for 77per cent of total revenue to the government.
The organisation stated that the nation has faced significant challenges in managing the sector such as unaccountable use of revenues and corruption.
EITI pointed out that it has been effective in strengthening public debate and promoting policy options around signature bonuses, unpaid royalties, fuel subsidies, crude oil and refined products theft, and unpaid subsidies.
It stated that NEITI identified $ 9.8 billion owed to the Federal Government, of which USD 2.4 billion has been recovered through Nigeria EITI’s efforts.
EITI also said that a new Petroleum Industry Bill (PIB) has been in the making since 2007, and is expected to reorganise the legal and fiscal terms governing the oil and gas sector.
It indicated that companies operating with a concession or license in the oil sector are liable to pay royalties, petroleum profit tax and corporate income tax.
It stated that in many cases, production-sharing contracts between the government and petroleum companies also determine the fiscal terms of oil and gas operations in the country.
EITI further said that companies involved in mining activities are liable to company income tax (20 percent or 30 percent), capital gains tax (10 percent), value added tax (5 percen) and education tax (2percent) among others.
In its recent report, NEITI had urged the Federal Government to put urgent machineries in motion to recover over $21 billion unremitted funds disclosed by its independent reports of the extractive industry, to fund the country’s economic recovery plan.
“A breakdown of the unremitted funds showed by NEITI reports of the oil and gas industry over the years include outstanding payments of $1.7billion arising from the transfer of eight oil mining leases, OMLs, from Shell Petroleum Development Corporation (SPDC) and the sum of $2.2million from four OMLs from Nigeria Agip Oil Company to the Nigeria Petroleum Development Company respectively. NEITI reports showed that the NPDC is yet to pay for these major national assets that were transferred for its commercial operations.”