NDDC, Local Content Taxes Are Major Challenges of Oil Industry, Says Baru

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Chineme Okafor in Abuja

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru, has said the major complaints of operators in Nigeria’s oil industry were more about multiple taxes levied on them.
Baru said these taxations include payments made to the Niger Delta Development Commission (NDDC) and Nigerian Content Development and Monitoring Board (NCDMB) otherwise called the Local Content Board.

A statement from the Group General Manager Public Affairs of the NNPC, Mr. Ndu Ughamadu, yesterday in Abuja quoted Baru to have said this when he met with consultants to the National Assembly on the Petroleum Industry Bill (PIB)
He reportedly told the team of consultants led by the lead consultant and former Director of the Department of Petroleum Resources (DPR), Mr. Osteen Olorunsola, to take a comprehensive look at the issues in the oil and gas sector and make bold recommendations that could engender enduring reforms in the sector.

Baru said with the passage of the Petroleum Industry Governance Bill (PIGB) which deals with the governance structure of the industry by the National Assembly, the remaining two segments of fiscal terms and host communities would require extensive consultation to aggregate views and opinions of industry stakeholders in order to strike a balance that could attract investments while ensuring a decent government take in terms of oil and gas revenue.
He specifically said the major complaint by operators in the industry was that of multiple taxation which include statutory contributions to the NDDC and NCDMB, as well as sundry expenses on security.

According to him, “We have to be able to design a system that works. If the three per cent, 13 per cent or any other statutory allocation for development is not working, then you should not be afraid to recommend a percentage that could work to replace the present system where operators pay multiple taxes and yet have to pay much more extra to secure their investments.”

He said the NNPC was interested in the segment of the PIB that relates to the fiscal terms and was ready to spend considerable time and efforts to ensure that the National Assembly got it right in the interest of Nigeria.
He stated that the NNPC would work very closely with the consultants to arrive at models that can respond to future challenges in the industry.

The statement also quoted Olorunsola, to have told Baru that the essence of the team’s meeting with him was to get inputs that would help them come up with a comprehensive and balanced report to guide the National Assembly in its legislative work on the remaining parts of bill.