Nigeria loses $3.3b in tax revenue to oil companies | ActionAid UK

Nigeria loses $3.3b in tax revenue to oil companies

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Nigeria lost US$3.3billion of tax revenue to oil giants Shell, Total and ENI through a series of extraordinary tax breaks - a new report from ActionAid reveals.

Nigeria granted the tax breaks to the companies from 1999-2012, exempting them from corporate tax payments — according to the report Leaking Revenue. Nigeria has one of the highest child mortality rates in the world with more than one in ten children dying before the age of 5. It also has the fourth highest maternal mortality rate in the world with 814 women dying for every 100,000 live births.

The research 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. Previous ActionAid research shows that tax incentives like the one granted to Shell, Total and ENI cost developing countries at least $138bn every year.

The British-Dutch company Shell was the greatest beneficiary after being exempted from paying $1.66 billion — equivalent to more than the entire Nigerian annual health budget. French company Total was exempted from paying $977 million and Italian company Eni was exempted $677 million.

ActionAid is calling on Nigeria to publish and review its tax break policies and collaborate with other countries in West Africa to end harmful tax breaks The charity is also calling on multinational companies operating in Nigeria, such as Shell, 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.

Anders Dahlbeck, ActionAid Tax Policy Adviser, said:

“This extraordinary tax break to some of the richest companies in the world cost Nigeria $3.3 billion – money that could have been used to fund critical health and education services, especially for women and children.

“These services are desperately needed. In the Niger delta women are forced to endure dangerous journeys if they want to give birth in a hospital. Schools are also underfunded, with some children having to be taught outdoors due to a lack of classrooms.

“ActionAid is calling on the Nigerian government to review its policies on tax breaks and show greater transparency on when and why tax breaks are granted.

“We also want multi-national companies  operating in Nigeria, such as Shell, 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.”

Notes to editors