. Indicts NIMASA over cabotage levy
Ejiofor Alike
Domestic crude valued at N2.45 trillion, about $15. 6 billion was sold in 2014 but only N1.44 trillion was paid into the Federation’s Account by the Nigerian National Petroleum Corporation (NNPC), resulting to an unreconciled and unremitted sum of N998 billion, according to the highlights of remedial issues in the Nigerian Extractive Industries Transparency Initiative (NEITI) 2014 audit report of the oil and gas sector, presented at the weekend in Abuja during the Civil Society and Media Consultation on remediation.
NEITI has also indicted the Nigerian Maritime Administration and Safety Agency (NIMASA) for failing to provide records of Cabotage freight levy collection.
According to the report, there is an accumulated unremitted $1.82billion gas flare penalty as at 2014, and total sum of $927.3million expended on non-cash call items from the cash call account in 2013, while in cash calls for Oil Mining Licenses (OMLs) 60, 61, 62, 63, the National Petroleum Investment Management Services (NAPIMS) owes a balance of $147.9million.
The report revealed that as at 2014, there was a prior year Petroleum Profit Tax (PPT) liability of $1.18billion yet to be remitted by the Nigerian Petroleum Development Company (NPDC), and an outstanding PPT liability of $1.12billion same year, which was not validated because the NPDC did not provide financial records.
The report stated that revenue losses in the oil and gas sector was as result of ineffective and inefficient agencies of government who are supposed to be alive to their statutory responsibilities to ensure transparency and accountability in the sector.
For instance, it said the Department of Petroleum Resources (DPR) has inadequate measurement infrastructure to determine the volume of gas flared, adding also that the agency has no effective receipt issuance and collection system.
The report also indicted the Nigerian Maritime Administration and Safety Agency (NIMASA) for failing to provide records of Cabotage freight levy collection.
Presenting further finding of the audit, the Director of Communications and Advocacy, NEITI, Dr. Orji Ogbonnaya Orji, said the report found the Federal Inland Revenue Service (FIRS) culpable as it suggested that Platform Petroleum Limited was owing Education tax for 2013 and 2014, whilst Waltersmith Petroman Oil Limited did not pay output VAT in 2011- 2014.
“Audit validation of payments into CBN account reviewed that some receipts were recorded without names of the paying entities and this resulted in improper recording,’ he said.
“Subsidy payments made by CBN could not be matched with subsidy claims processed for marketers for 2014. CBN did not report or present the Nigerian Export Supervision Scheme (NESS) remittances on a company-by-company basis. Errors of material omissions in filling the template submitted by NEITI to the CBN with the risks that the information in the templates may be incomplete or understated,†Orji added.
The NEITI report, however, showed that existing legislation was responsible for non-remittance of oil royalty from Statoil (OML 128) and TUPNI (OML 130), as there is no percentage royalty on assets operated beyond 1, 000 water depth according to the extant law, and suggested that new legislation be made to address this.
Addressing the session earlier during his presentation on fixing remedial issues, Executive Secretary, NEITI, Mr. Waziri Adio, said the purpose of the meeting was to bring stakeholders – the civil society and the media together, to update them on the 2014 audit report and also, to have them contribute on how to ensure transparency and accountability in the extractive sector.
He said NEITI had developed four strategic plans to be executed between 2017 and 2021 as part of its effort to ensure improvement in resolving remedial issues.
These, according to him, include: to deepen openness in the extractive sector through timely audits and other impactful studies; shape extractive sector and overall governance reforms through policy engagements, leadership, and inter-agency cooperation.
