Business Day: Nigeria loses $22bn as IOCs sell oil blocks

A total of $22 billion will be lost by Nigeria in the form of tax holiday and divestment tax forfeitures between 2014 and 2019 according to a government document seen by BusinessDay.

The losses resulting from a bogus tax exemption policy begin at $1.232 billion in 2014, $2.080 billion in 2015, $2.445 billion in 2016, $2.378 billion in 2017, $2.265 billion in 2018 and a whopping $9.4 billion in 2019 which the government called “a cataclysmic year.”

The 23 page document prepared by Timothy Okon of the Nigerian National Petroleum Corporation, questions the position by some that the oil divestment will help boost the country’s proven oil reserve levels but it is in the area of tax losses that it was more scathing.

Two basic laws govern divestment of assets in Nigeria oil and gas sector. These are the capital gains tax, CGT, which prescribes a tax of 10 per cent of the capital gains arising from the disposal of an asset and the petroleum profit tax, (PPT) which allows for the deduction of acquisition cost as qualifying capital expenditure.
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