The Nigerian National Petroleum Company Ltd (NNPCL) incurred a total of N2.69 trillion as tax in the full year 2023.
This is according to the company’s financial statement for the full year 2023 published on its website yesterday.
However, total taxes paid by the NNPCL in 2023 was N1.17 trillion comprising N497.26 billion income tax and royalties amounting to N669.09 billion as stated in its cashflow report.
Why NNPCL did not pay any taxes in 2022
The NNPCL tax expense in 2023 contrasts with the preceding year. In 2022, the company received a tax credit of N717.07 billion.
Last year, the Nigeria Extractive Industry Transparency Initiative (NEITI) accused the NNPCL of not remitting up to N2.8 trillion in taxes to the federation.
According to the NEITI report, the NNPCL also failed to pay about N4 trillion to the federal government.
The report further revealed that as of July 31, 2023, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had outstanding tax collectable revenues totalling $8.251 billion, a figure accurate as of December 31, 2022.
Notably, over 80% of this substantial amount is attributed to the Nigerian National Petroleum Company Limited (NNPCL), emphasizing the significant responsibility resting on this entity.
However, the NNPCL in a statement by its Corporate Communication Officer, Olufemi Soneye clarified that it was not withholding any public funds and explained that what NEITI reported as non-remittance represented the payments owed to the company for shouldering the fuel subsidy burden on behalf of the Federal Government.
In 2022, the country budgeted up to N4 trillion on PMS subsidy to keep prices below the landing cost. However, this figure rose to N4.39 trillion or $10 billion which is 40% of the country’s total revenue by the end of 2022 leading to the termination of the policy by President Tinubu on assumption into office.
Breakdown of tax expense by NNPC in 2023
- In 2023, income tax paid reached N497.2 billion, a significant increase of 385% from N102.5 billion in 2022. Cash royalties totalled N669 billion, up by a whopping 774.5% from N76.5 billion the previous year.
- Additionally, dividends paid to its sole shareholder, the Federal Government, amounted to N546.6 billion, compared to none in the previous year.
- Petroleum Profit tax for the year under review stood at N1.22 trillion from N613.16 billion in the preceding year.
- The company incurred an education tax of N153.94 billion in 2023, an increase of 377% from the N32.26 billion recorded in 2022. Police trust fund payments by the company declined to 349 million from N13.18 billion in 2022.