Despite the dwindling prices of oil and gas in the international market, Nigeria earned about $3.21 billion or N632.37 billion in 2015, through the liquefied natural gas, LNG, project, going by the exchange rate of N197 to a dollar.
This is even as the NLNG said the tax break the company propelled it to expand to six trains, as against the two trains for which it was set up.
The 2015 revenue is more than $2.79 billion or N549.63 billion earned in 2014. The figures are contained in the Facts and Figures on the Nigeria Liquefied Natural Gas presented to journalists by Babs Omotowa, the Managing Director of the Company.
Out of the amount earned last year, $2.16 billion or N425.52 was earned through company income tax and export tax, which accrued to the Federal Inland Revenue Service, FIRS, while $1.04 billion or N205.62 billion was earned through dividend to the Nigerian National Petroleum Corporation, NNPC, which represents the federal government on the board of the NLNG.
Also, within the period under review, NLNG made a pay as you earn, PAYE, payment of N8.43 billion, while value added tax, VAT, earned the country about N3.97 billion. Omotowa, who attributed the reduction in revenue on decline to global crude oil prices, however said that despite the challenges, the company remains the highest tax paying corporate entity in Nigeria. “We have paid $3.86billion in taxes to governments in Nigeria and our PAYE stands at $334milion since 1999 till data.”
“We have the 4th largest plant in the world, supplying 7 per cent of the global LNG market. We also contribute 14 per cent to Nigeria’s budget. NLNG provided more than 12,000 jobs each construction year. Overall, the major sub-contractors employed over 18,000 Nigerians in technical jobs in the base project,” Omotowa said.
Speaking on the contentious tax which the company has enjoyed, Omotowa said that the money within the period was ploughed back to the company, as it facilitated the expansion to more trains than were initially planned.
He said, “NLNG had a 10-year tax period. In the first five years, we did not pay dividend to the shareholders. All the money we made was used ploughed back into the business. The company was initially set up to do two trains. But by the 10 years incentive and the five years that we did not pay dividend to shareholders, we were able to build four more trains. If you think about it, you can see the huge value the tax break has given to Nigeria.
“If we did not have that break, we would have been running two trains today. Instead of $90 billion, we probably would have been talking about $20 billion. And instead of $33 billion revenue to the government, we would be talking about $11 billion. “The tax break has been of significant value. The low price of oil has also affected the gas market. Both oil and gas are used to generate energy. Though we signed a 25 –year contract, it is linked to oil price. Despite the reduction in oil price, we are working to look for new market and new opportunities, as we are quite a lot to be more operationally efficient so as produce more and reduce our cost.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.