NLNG faults ActionAid claim on tax incentives

Kunle Kalejaye 25 January 2015, Sweetcrude, Lagos – The Nigeria LNG Limited, NLNG, has faulted claims made by ActionAid that the government lost $3.9 billion as a result of tax break granted to the company.

NLNGActionAid, a non-governmental organisation, recently alleged in it report  that the Federal Government lost the sum of $3.9 billion as a result of granting NLNG tax holiday.

But, NLNG, in statement signed by its General Manager, External Relations, Mr. Kudo Eresia-Eke, ‎said the reality was that the Federal Government’s initial investment of US$2.5 billion, bolstered by the associated tax incentives, has so far yielded over US$33 billion in the form of dividends, taxes and feedgas purchases for the country over the past 16 years.

This is in addition to US$ 5 billion accruing through corporate spend on local goods and services during the same period, Eresia-Eke said.

He stated that the company paid $3.6 billion in Company Income Tax and Education Tax between 2014 and 2015. This is in line with NLNG’s corporate vision to help build a better Nigeria.

Explaining the reason for the tax holiday, Eresia-Eke stated that Nigeria LNG Limited was established at a period when the LNG technology was still very new in Africa.

“Indeed, the establishment of NLNG made Nigeria the first country in Sub-Saharan Africa to possess such new technology and the second such country in all of Africa.

“Considering the pioneering nature of such a company in Nigeria, as well as the huge  investments required, running to several billions of dollars in foreign investments, NLNG was granted a 10-year tax holiday by the government under the provisions of the Nigeria LNG (Fiscal Incentives, Guarantees and Assurances) Act, CAP. N87, Laws of the Federation of Nigeria, 2004 (“NLNG Act”).

“The concept of tax holidays are not unusual practice in the global business community. Indeed Angola has notably offered as much as 12 years tax holidays to encourage investments in their LNG industry, while other countries like Oman, Malaysia, Qatar and Trinidad have offered up to 10 year tax holidays to attract LNG investments”.

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