Oil Firms’ Income Tax Payments Decline To N47.74bn
The company income tax paid by oil and gas companies to the Federal Government fell by N4.94bn or 10.25 per cent in 2020, official figures have shown.
An analysis of data collated from the National Bureau of Statistics showed that companies producing crude oil and gas in the country paid N47.74bn in corporate tax last year, down from N52.68bn in 2019.
The company income tax paid by oil producers fell to N40.77bn from N45.7bn while the amount of taxes paid by gas-producing companies dropped to N6.97bn from N6.98bn, according to the NBS data.
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 N1.41tn as CIT last year, with oil and gas companies accounting for 3.39 per cent.
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.
Last year, the collapse in oil prices and demand on the back of the COVID-19 pandemic hit most oil and gas operators, with capital expenditures slashed and projects suspended.
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.
No tax oil was lifted by the NNPC on behalf of the FIRS in August, according to data from the corporation.
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, 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 textile and garment industry generated the least.
