The Federal Government has declared that the Petroleum Industry Bill that is currently before the National Assembly will cut down the multiple taxations in Nigeria’s oil and gas sector, particularly in the onshore and shallow water operations.
The Minister of State for Petroleum Resources, Timipre Sylva, said the government was aware of complaints by industry players concerning the level of taxation in the oil sector.
Sylva disclosed this in his presentation at the 7th Virtual Joint International Energy Forum-International Gas Union Ministerial Gas Forum, Kuala Lumpur, Malaysia, which was made available to our correspondent in Abuja on Friday by the petroleum ministry.
He said, “We are not unmindful that industry players are of the view that the current level of taxation on onshore and shallow water operations is excessive and therefore the proposed PIB should include a significant lowering of these taxes for new investments and for existing operations.
“As a government, we have identified major constraints that have delayed recent projects from reaching financial close or caused projects to be delayed and/or abandoned altogether.
The minister added, “The Petroleum Industry Bill before Nigeria’s legislative arm that we propose will, I believe, provide this new framework.”
Sylva noted that to secure the future of the industry in Nigeria, fiscal and other terms must be based on a more conservative economic outlook.
He said a framework must be created for the Nigerian petroleum industry to grow and invest in additional petroleum production even under difficult economic conditions.
“For this reason, we are proposing grand fathering in the new PIB. The proposed PIB framework shall be based on core principles of clarity, dynamism, neutrality, open access and fiscal rules of general application,” he said.
He noted that the fundamental challenge in the industry revolved around institutional or structural problems relating to the production, use, or regulation of gas.