THE Nigeria LNG Limited (NLNG) has agreed to pay to the Nigerian Maritime Administration and Safety Agency (NIMASA), on an “under protest” basis, variouslevies which NIMASA claims are overdue statutory payments by NLNG.
According to NLNG in a statement signed by its General Manager, External Relations, Kudo Eresia-Eke, the total amount involved is $140 million to cover arrears in these levies as claimed by NIMASA, having earlier made an initial payment of $20 million.
The statement noted that the company “has agreed to pay, again “under protest”, the levies as they become due until a judicial ruling on whether these payments are justified can be obtained.
The statement reads in part: “Despite a court order to the contrary, NIMASA undertook a blockade of NLNG operations since June 21, 2013, causing production to cease. This has now led to colossal losses to NLNG, and more importantly to Nigeria.
“Owing to the NIMASA blockade which persisted in spite of court orders, the company has lost revenues of over N76 billion ($475 million), 65 per cent of which belongs to the Federal Government, which has thus lost about N50 billion in dividend, taxes, etc. The blockade had also led to scarcity of cooking gas with attendant spiraling cost and worsening hardship on the populace, reduction of domestic gas to power, shutdown of offshore and onshore production facilities, etc. In addition, it has caused huge reputational damages to NLNG and Nigeria
“As a result of NLNG agreeing to make these payments, albeit under protest, NIMASA has agreed to lift the blockade of NLNG ships immediately. NLNG is working to resume operations as quickly as possible.”
The statement quoted NLNG Managing Director, Babs Omotowa as saying: “We feel we have no other option than to now make these payments under protest. In doing this, we have taken into account the overriding national interest; in particular to stem the huge financial and reputation loss the country has suffered as a reliable LNG supplier, a destination for foreign investment and a nation of the rule of law.”
It noted that NLNG still strongly believes that it has a very strong case to be exempted from the NIMASA levies under the terms of the NLNG Act and will continue with its substantive case in court to obtain a judicial determination of whether or not such levies are due to be paid, adding that it is for this reason that the payments that NLNG is making will be made on an “under protest” basis.
According to the statement, NLNG has always insisted that as a Nigerian company involved in a global business it must always act in conformity with the law, at all times. It clarified that the dispute with NIMASA had nothing to do with tax as misconstrued in some quarters, but with levies which the laws explicitly exempts it from paying.
“Our position has nothing to do with how much NLNG is being charged by a relevant agency but with the legality or otherwise of such a charge or levy, in order for us to ensure that all our payments are made within the ambit of what is lawful.
“As a law abiding company, NLNG has always paid its taxes, including those due after its tax holidays since 2009. It, therefore, has no issues with legally required tax payments but with levies from which it is clearly exempted by virtue of the NLNG Act,” the statement said.
