The federal government has reduced tax rates in the currently reviewed Petroleum Industry Bill, PIB.

This was revealed by Mr. Pedro Omontuemhen, an Accountant consultant with PricewaterCooperHouse in his presentation on ‘Structuring the Petroleum Industry Bill for Long Term Oil and Gas Industry Competitiveness in Nigeria’ at the Pre-conference workshop of Nigeria Association of Petroleum Explorationists, NAPE, on Monday.

According to him, the Bill which had been in the discourse for 20 years will now have a total of 72.5% (30% Company Income Tax, CIT, and 42.5 national hydrocarbon taxes) as against 85%/65.7% onshore and shallow waters tax rate. He explained that there will be no more Petroleum Profit Tax, PPT, however; there will be a re-emergence of the hydrocarbon tax at a rate lower t than the PPT.

“Oil companies will now be liable to the CIT,” he said, adding that there will now be an increased in royalty rates. “No more zero royalty rate for areas beyond 1000 meters depth. Royalty rate will now be based on production terrain by price. As the price grows, royalty also grows,” he said. He also said the Investment Tax Allowance will be repealed, alongside the Petroleum Investment Allowance, PIA, and be replaced with production allowance at a lower rate of $2.50 per barrel of fiscal oil price of Grandfather contract.

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Source: SweetCrudeReports