Thursday, June 17 2021 / 04:42 PM / by CITN / Header Image Credit: Nigeria LNG
It is pertinent for every government to create an enabling business environment for Foreign Direct Investment that will increase the Gross Domestic Products within the economy and Nigeria is not exempted from creating such an enabling business environment to attract businesses locally and internationally. To facilitate business opportunities in the Natural Gas sub-sector of the Oil and Gas Industry, the law to regulate the sub-sector was enacted and it made provision for the grant of tax incentives or tax holiday to qualified organizations.
A tax holiday is a government incentive program that offers a tax reduction or elimination to businesses. It is a government incentive programme whereby for a period of time, a business or company is excused from all or part of its tax liabilities.
Tax holidays are always granted in the hope of increasing a country's economic performance. In Nigeria, several tax holidays/ incentives that are designed to promote investment have been introduced and one of such incentives is the grant of pioneer status to a business according to the provisions of the Industrial Development (Income Tax Relief) Act, Cap I 7, Law of the Federation of Nigeria, 2004.
The Nigeria LNG (Fiscal Incentives, Guarantee and Assurances) Act, is a Nigerian legislation with tax holiday provisions specifically granted to favour Nigeria LNG (NLNG or the Company). Therefore, one justification for the tax holiday granted to the NLNG is that the Company is considered one of the most significant economic projects carried out in Nigeria.
Legislative Setting of The Pioneer Status In Nigeria LNG ACT
Strategic Goal of NLNG's
Nigeria LNG Limited (NLNG) considers Nigerian Content an important feature of all its activities.
In the company, all approved Nigerian Content Plans are aimed at attaining maximum achievable Nigerian Content deliverables in related activities, the ultimate goal is to achieve the targets set in the Nigerian Oil and Gas Industry Content Development Act (NOGICD Act) 2010.
By embedding the requirements of the NOGICD Act 2010 in all its contracting and procurement processes, the company has enshrined Nigerian Content as a key deliverable.
Nigeria LNG Limited (NLNG) is working toward the establishment of a pool size of competent, reliable and competitive vendors who can supply from their sources all of NLNG's material and service requirements wherever practical and, in the process, add value to NLNG.
NLNG aims to shift from direct purchases from overseas manufacturers and vendors to ordering from well-established, efficient and competitive, in-country Nigerian manufacturers and service providers for all product groups and work categories.
Community Vendor Development
In a proactive bid to discover more Nigerian sources, Nigerian Content surveys and vendor forums are conducted at scheduled intervals to identify indigenous companies capable of providing the goods and services required by NLNG.
Below are some laudable achievements in this regard:
Becoming An NLNG Vendor
Suppliers interested in pursuing business opportunities within NLNG are encouraged to take the following steps:
It is imperative to note that Vendors registered to do business with the company shall undergo a pre-qualification/review process to ascertain and confirm their suitability and capability for performing supply and/or contracting obligations for the company.
Basic appraisal criteria shall include their managerial and technical capability, supply or contracting experience, access to original equipment manufacturers (OEMs) or reputable supply sources and/or technical partners, financial capability, access to IT communication tools, compliance with HSE requirements and other mandatory statutory requirements for registration with companies in the oil and gas industry.
To maximize the potentials in Natural Gas sub-sectors of the Oil and Gas Industry, ensure to familiarize yourself with other related laws such as:
NIMASA Act, Coastal and Inland Shipping (Cabotage) Act, Companies Income Tax Act and any other laws on the profits derived from businesses in Nigeria and of the countries in which NLNG operates and does business.