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
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
Legislative Setting of
The Pioneer Status In Nigeria LNG ACT
- Tax relief period
- Liability to companies tax
- Dollar accounting
- Interest on loans
- Withholding tax on interest, dividends, etc
- Exemption from customs duties
- Restriction on set-off of capital allowance
- Guarantees and assurances
- Short title and
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.
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:
- The Finima Legacy Projects for 50 and 20 houses were carried out by NLNG to
fulfil promises made to the community. Through NLNG’s initiative to empower
local contractors via the Finima Legacy Project, 11 host community-based
contractors made capital investments in their companies thereby expanding their
operating capacity. The contractors were involved in the civil and electrical
infrastructures for the construction of 4-bedroom bungalows.
- Strategic partnerships have been made between the more established Nigerian
vendors and the community vendors. A good example is the case of SJ Abed and
Vikal Nigeria Enterprise for the provision of catering services.
- Fifty-four vendors from the community have been trained at Bonny Vocational
Centre to improve their skills in business development and project management.
- NLNG’s deliberate strategies implemented to increase spending in the community
have led to a significant increase in year-on-year spending.
Becoming An NLNG Vendor
Suppliers interested in pursuing business
opportunities within NLNG are encouraged to take the following steps:
- Register their businesses with the Nigerian Corporate Affairs Commission or,
for foreign/overseas vendors, with recognized certification organizations;
- Learn more about how to do business with large corporations by attending
seminars and workshops;
- Understand NLNG’s business.
- You can apply online via HERE
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
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