Where did the $1.6 billion Nigeria Liquefied Natural Gas Ltd’s (NLNG) contribution to the multi-billion naira bailout package for bankrupt states come from?
The question, which has sparked a row between the Presidency and the Peoples Democratic Party (PDP), has been settled.
The fund is from the NLNG’s Company Income Tax and Education Tax, which it paid on June 17 to the Federal Inland Revenue Services (FIRS). The money has nothing to do with dividends from the NLNG giant.
This source is contrary to the PDP’s claim that the money was from the Goodluck Jonathan administration’s savings. PDP spokesman Olisa Metuh, in a statement on Wednesday, claimed that NLNG’s dividend stood at $5.6 billion before the May 29 handover and would have been shared but for the insistence of former president Jonathan that it should be left for the incoming administration to manage.
NLNG Managing Director Babs Omotowa, in an exclusive interview with The Nation in Lagos, said the company paid $1.6bn as Income Tax and Education Tax to the Federal Government through the FIRS for the 2014 financial year as required by law.
Omotowa added that the company paid $1.3bn last year. Its recent payment has generated a buzz because of the transparency of the Muhamadu Buhari administration, according to Omotowa.
He explained that dividends are paid quarterly or bi-annually, depending on income, adding that in the last 10 years, the company has paid over $30bn to its shareholders, including the Nigerian National Petroleum Corporation (NNPC), Shell, Eni and Total (49 percent of this has gone to the NNPC).
The NLNG chief said: “The $1.6b we paid on June 17 was our Company Income Tax and Education Tax. The money was paid to the Federal Inland Revenue Services (FIRS) as our 2014 income tax payment. You may recall that last year, we paid $1.3b to the FIRS as our Company Income Tax and Education Tax for the previous year. So, that particular amount is for tax.
Dividend is a different issue and different payment. We make dividend payment to our shareholders, who include NNPC, Shell, Eni and Total. Those dividends are paid to them quarterly or bi-annually, depending on how much cash we generate. Of course, in the past, over the past 10 to 15 years, we have paid over $30b as dividends to all our shareholders.”
On how much of the $30b has gone to the NNPC, Omotowa said: “We can only tell you that we have paid $30b. Dividends are paid by the equity shareholding of each shareholder. NNPC holds 49 percent. Shell owns 25.6 percent, Total owns 15 percent and Eni owns 10.4 percent. Those are the percentages by which the dividends are paid.”
On why the 2014 Income Tax and Education Tax are just being paid, he said: “It is for the 2014 accounting year, which ended December. Of course, you have to do your audited accounts and you have to get that audited accounts approved and the CIT Law requires you to pay it before June ending.”
Speaking on its position on the table of major contributors to government coffers, Omotowa said: “It will be difficult for me to know what other companies pay, but I know that in terms of Company Income Tax, we are the highest in the country. In fact, we are the highest in sub-Saharan Africa in terms of Company Income Tax. But of course, there are other payments other companies pay. Some of them pay royalties and pay other funds. We, in addition to our Company Income Tax, pay dividends to our shareholders. I think when the government looked at it last year, we were ranked the No 4 company by the government’s own ranking. But, in that ranking, we were the No 1 indigenous, home-grown company because the other three are foreign companies. We believe we are in that sort of region in the top contributor to the Nigerian economy.”
He explained that aside the CIT and Education Tax, the company also pays Value Added Tax (VAT) and other levies.
“We also pay VAT and withholding tax of which over the years, we have paid over $1.4 billion. Over the last 15 years, we have paid over $1.4 billion. At state level, we also pay taxes, the PAYE taxes. We pay about N6b annually to state government.
“At local government, we also pay our local government fees and charges of over N100 million as well.
“And then, to various agencies, including DPR, NIMASA, Federal Ministry of Trade and Industry and a whole raft of agencies. We pay more than 20 agencies various fees, including the NCAA for our airstrip… That is one of the big challenges in Nigeria that makes us less competitive in the global market because our operating environment is just challenging. Today, we have more than 16 people from various agencies who are in our plant from the government trying to carry out regulatory activities. This is just something that could be better streamlined,” he said.