Nigeria lost over (about N475.8 billion) to the granting of tax waivers under the pioneer status scheme to oil and gas companies in the upstream sector between 2009 and 2016.
The Nigeria Extractive Industries Transparency Initiative (NEITI) put the figure at $1.17 billion between 2009 and 2014. But between 2014 and 2016, the figure rose to $1.56 billion.
The granting of pioneer status to a company in Nigeria is aimed at enabling such a company operating within the pioneer industry to make significant capital expenditure and a reasonable level of return of profit within its formative years without having to pay tax.
Also, experts believe that the government should revoke taxes, incentives and waivers already granted to companies and the revenue be used to achieve economic recovery. Due to the abuse of the scheme, Nigerian Investment Promotion Commission (NIPC) has temporarily suspended the pioneer status pending a comprehensive review of the scheme, with a view to increasing transparency.
Some of the oil companies, which have or are still enjoying the pioneer status in Nigeria are Seplat Petroleum Development Company; Allied Energy; Midwestern Oil & Gas; Brittania Oil Nigeria Limited; Suntrust Oil Company Nigeria Limited; and Niger Delta Petroleum Resources Limited.
Already, about 10 electricity companies, which include Akute Power Limited, Alausa Power Limited, Geometric Power Limited, Greenfield Intergrated Energy and Ibom Power Company Limited are under investigation. Others are Isolo Power Gen Limited; Kotco Power Industries; Omega Power Limited; Tower Power Utility Limited; and Ughelli Power Plc.
Some oil and gas firms have also been invited to defend their stand on the abuse of pioneer status. They include Elcrest Exploration and Production Nigeria Limited; Premier Petroleum; Novo Gas Limited; Encrest Exploration and Production Nigeria Limited; Nextee Oil and Gas Nigeria Limited; Network Oil and Gas Limited; and Navas Gas Limited.
It was learnt that the Nigerian Investment Promotion Council (NIPC) has on several occasions, granted the pioneer status retrospectively, thereby causing the government to even refund taxes already paid by the companies, which has cost the Federal Government about N1.850 trillion in revenue.
It was also learnt that NIPC has issued pioneer status certificates to companies other than those envisaged by the law, including petroleum and production companies. NIPC has even allegedly granted companies for five straight years contrary to extant laws and has also granted unwholesome extensions and even further granted the status to companies that previously benefited from the grant.
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