April 16, 2024

 Private sector must resist new tax increases by FG until it stops organised oil theft– Oyedele, West Africa Tax Leader at PwC

Oredola Adeola

Mr Taiwo Oyedele, the Fiscal Policy Partner and West Africa Tax Leader at PricewaterhouseCoopers,  has called on the private sector to resist any new or further tax increases by the Federal Government until it is able to stop oil thieves include senior government officials, security forces and religious leaders, among others.

Oyedele made this known in a statement obtained by EnergyDay, reacting to the statement of Mele Kyari, Group Chief Executive Officer(GCEO) of NNPC Limited, at the 49th session of the State House Ministerial Briefing held at the Presidential Villa, Abuja, confirming that the oil thieves include senior government officials, security forces and religious leaders, among others.

According to him,  the private sector should resist any new or further tax increases until the government can demonstrate that it has done everything within its powers to stop the siphoning of our commonwealth.

The PwC Fiscal Policy Partner said, “Crude oil theft is a haemorrhage in Nigeria. Our average daily production in the first 6 months of 2022 was 1.22m bpd compared to the average OPEC quota of 1.72m bpd for the period.

“This amounts to about a 500,000 bpd shortfall all of which can be attributed to oil theft directly and indirectly. While most oil producing countries are smiling to the bank given high oil prices, Nigeria is virtually broke resorting to heavy borrowing to fund the budget.

“With an average crude oil price of $112 in the first half of 2022, the financial loss translates to about $10b for 6 months or $20b if extrapolated for the year. This is more than 50% of our external reserve or over N8tr, which is more than the entire tax revenue collected by the FIRS and the 36 states plus the FCT in 2021,” PwC’s West Africa tax said.

Oyedele further noted that the unfortunate impact of activities of the economic saboteurs have led to the loss of foreign exchange receipt leading to scarcity, Naira devaluation and imported inflation; revenue shortfall to all levels of government and impact on social services; and increase in crimes as a result of huge cash in the hands of oil thieves

Other consequences, according to him, are rising public debt due to consistent borrowing to fund budget deficits; under Investment in the oil and gas sector and capacity underutilization due to short-ins; and higher production cost of crude oil due to pipeline vandalism, production losses and associated overheads.

The PwC’s West Africa tax leader further noted that Nigeria will as result of the economic saboteurs record increase in unemployment due to under-investment and capacity under utilisation and environmental degradation due to pollution associated with the oil theft activities

Oyedele however noted that the protest by the private sector must now be treated with utmost sense of urgency.