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Nigeria: NNPC Rejects Tax Exemption for NLNG Contractors
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Leadership (Abuja)
18 July 2008
Posted to the web 18 July 2008
Philip Nyam
Abuja
The House of Representatives Committee on Gas has expressed deep concern over the attitude of Nigerian Agip Oil Company Limited (NAOC) for its poor response to the efforts to amend the Nigeria Liquefied Natural Gas (NLNG) fiscal incentives, guarantees and assurances Act by the House.
This is just as the Nigerian National Petroleum Company (NNPC) has supported the deletion of Section 7 of the Act which exempts NLNG contractors and sub-contractors from payment of import duties, taxes and charges on import of plant, goods, machinery, shipping and transmission.
This is even as the NNPC has expressed support for the proposed amendments to the Act, submitting that after the tax holiday granted NLNG, which is due to expire in 2009, the company would revert to CITA.
Chairman of the committee, Hon. Igo Aguma, who stated this yesterday at the resumed hearing on the bill for an act to amend the LNG Act accused AGIP of being unfriendly in its operations and relationship with stakeholders in the country. He expressed dismay with the presentation of the company at the public hearing, which he said smacks of contempt and disrespect for the House.
"AGIP and whatever they represent remain a burden in the oil industry in Nigeria. If this is the attitude AGIP has in LNG, it will be difficult for the legislature to support our national investor, the NNPC in the LNG.
"You have chosen to disrespect the parliament but no amount of intimidation will deter us from protecting the sovereignty of the country. We want to say categorically that no company is bigger than Nigeria. You people (AGIP) have remained unfriendly and unrepentant.
Aguma assured that in spite of the sabotage from stakeholders like AGIP, the final outcome of the committee's work will be a true reflection of the aggregate position of the public hearing including all memoranda presented.
Representative of AGIP, Elvis Eboho had while presenting a proposal before the committee insisted that it was the position of shareholders and refused to answer questions posed by members of the committee on gas. According to him, they prefer the NLNG Act to remain as it is.
Meanwhile, the coordinator, corporate and legal services of the NNPC, Chief Sena Anthony has said that the company supported the proposed amendment to section 3 of the NLNG Act that the company revert back to CITA at the expiration of the tax holiday. Making her submission before the public hearing, Chief Anthony explained that the NNPC was in total support of deletion of section 6 of the Act since NLNG will not be eligible for the exemption after the tax holiday.
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She said "the tax holiday granted is time bound and is due to expire by 2009 or earlier, if it can be established that the LNG cumulative average sales price has reached $3 mmbtu (section 2 of NLNG Act)"
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