By granting Pioneer Status, the Federal Government has waived $2.1 billion (N1.1 trillion) to 22 oil companies through tax holidays as at 2014, The Guardian reports.
These companies are operators in the marginal field segment of the Nigerian oil and gas industry, according to the latest report from the Nigerian Extractive Industries Transparency Initiative (NEITI). NEITI, the revenue watchdog in its 2014 Oil and Gas report, regards the tax waivers, as a loss of revenue to the federation, which it noted, would hamper development projects in the economy. It stated that granting pioneer status to oil and gas companies has greatly undermined the optimal collection of revenue due from Petroleum Profit Tax (PPT).
The agency therefore, said that pioneer status should not be granted to any company in the oil and gas sector, unless it is evidently clear that the company is actually pioneering an aspect of the industry in the country. It therefore, called for a regular review of the pioneer status to discover some of the companies granted tax waivers that had outgrown pioneer status.