Three of the world’s biggest oil and gas companies – Shell, Total and ENI – were granted an extraordinary series of tax breaks worth a staggering US$3.3billion in Nigeria, according to a Huffingtton Post report.
The revelation was made in a a new report from ActionAid, titled, ‘Leaking Revenue’. The report has for the first time revealed the scale of the tax loss – money that could have been used to fund key public services like healthcare and education.
Nigeria granted the tax breaks to the three companies from 1999-2012, exempting them from corporate tax payments. The British-Dutch oil giant Shell was the greatest beneficiary after being exempted from paying a total of $1.66 billion – equivalent to more than the entire Nigerian annual health budget.
French company Total was exempted from paying $977million and Italian company Eni was exempted $677million.
The report raises further questions about whether developing countries are giving away billions of dollars in tax revenue unnecessarily. ActionAid’s research shows that the oil companies’ investment would have been highly profitable even without these harmful tax incentives.
To tackle this, Nigeria should publish and review its tax break policies and collaborate with other countries in West Africa to end harmful tax breaks.
Multinational companies working in Nigeria, such as Shell, were also called upon to pay their fair share of tax and publish their tax payments in every country they operate, including details of tax breaks they’ve been given. These companies should not seek harmful tax breaks that haven’t been publicly disclosed or debated by lawmakers.