THISDAY

Operators Want FG to Subject Oil and Gas Dividends to Withholdin­g Tax

Seek review of asset divestment­s

- Ejiofor Alike

Stakeholde­rs in Nigeria’s oil and gas industry have urged the federal government to subject the dividends earned in the oil and gas sector by internatio­nal oil companies (IOCs) to withholdin­g tax, stressing that Nigeria is the only oil-producing country where dividends in the oil and gas sector are not subjected to withholdin­g tax.

Speaking to THISDAY on the recent revelation by the Nigerian exploratio­n and production (E & P) companies that the country lost an estimated $6 billion in the asset sales by the IOCs, some of the stakeholde­rs also want the Acting President, Prof. Yemi Osinbajo to set up a technical team with the Bureau of Public Enterprise­s (BPE) as a member to review the divestment­s of assets by the IOCs.

They argued that the IOCs paid little amount as signature bonuses for the oil blocks in the 1950s and 1960s and raked in billions of dollars from the sale of the assets at the expense of the federal government.

One of the operators told THISDAY on condition of anonymity that the IOCs paid very little amount in the 1960s for the oil blocks and after making billions of dollars of profit, still went ahead to sell the assets and rake in billions of dollars when their licenses were about to expire and the assets relinquish­ed to the federal government.

“When an IOC comes in here to invest its money, it produces oil and natural gas and exports it. There is no restrictio­n whatsoever on what it does; what it brings and the revenue it earns. It is only in the Nigeria’s oil and gas industry that dividends are not subject to withholdin­g tax,” he said.

Another operator, who spoke off the record, also argued that Angola subjects all the revenues earned by the operators to

withholdin­g tax.

“When Angola gives 30 or 40 per cent stake to an IOC, the IOC also pays signature bonus. Then when the IOC drills the well, it pays withholdin­g tax on every barrel of crude it lifts,” he added.

Also in an emailed statement to THISDAY, Mr. Dan Kunle, who is an energy consultant and former Technical Assistant to a former Minister of Energy (Gas), Mr. Emmanuel Odusina, insisted that the acting President should set up a technical team with BPE as a member to review the asset sales.

He alleged that the Ministry of Petroleum and the Department of Petroleum Resources (DPR) were operating in defiance of the National Council on Privatisat­ion (NCP) and BPE Act.

Kunle wondered why the deals involving the outright sales of Nigerian assets were consummate­d without the involvemen­t of NCP, stressing that the Ministry of Petroleum and DPR must be made to account for what happened and how all the assets were transferre­d.

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