The Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN) has voiced strong opposition to President Bola Tinubu’s proposed tax reform bills, cautioning that the legislation could stifle growth in Nigeria’s oil and gas sector. According to the union, the reforms if passed without critical amendments could undermine the financial stability of key regulatory agencies and discourage investments in the upstream and downstream sectors.
PENGASSAN President Festus Osifo expressed these concerns during the union’s National Executive Council (NEC) meeting in Abuja. Osifo warned that the Nigeria Upstream Regulatory Commission (NUPRC) and the Nigeria Mid and Downstream Petroleum Regulatory Authority (NMDPRA), both vital to the industry’s functioning, would face significant challenges under the proposed tax regime.
Key Concerns and Calls for Action
Osifo’s primary concerns centered around the potential for the tax bills to increase operational costs, reduce investor confidence, and ultimately slow down exploration and production activities. He emphasised the need for expanded tax relief measures to mitigate the impact on workers and businesses within the sector.
“The proposed reforms must not be rushed through without thorough consideration. Tax relief exemptions should be widened to cover more workers and companies, particularly those earning minimum wage or operating in high-risk sectors like oil and gas,” Osifo said.
He highlighted the need for clarity on revenue collection processes for oil and gas companies, noting that ambiguity in the current draft could lead to compliance issues and disputes.
“Some provisions in the bills could disrupt operations at key institutions like the NUPRC and NMDPRA. This would have a ripple effect on our members and the broader industry,” he added.
A Call for Inclusive Legislative Process
PENGASSAN urged the National Assembly to conduct comprehensive public hearings, allowing stakeholders to voice their concerns and suggest improvements. The union warned against a hasty passage of the bills, which could lead to unintended consequences for Nigeria’s economic stability.
“We expect a genuine public consultation process where diverse views can be heard and incorporated into the final legislation,” Osifo stated. “This is not just about ticking a box—it’s about getting it right for the long-term health of our industry and economy.”
Balancing Reforms and Industry Needs
While some, including Bishop Matthew Kukah, have praised Tinubu’s tax reforms as a necessary step to curtail elite excesses and boost revenue, PENGASSAN insists that any reform must strike a balance between government objectives and industry sustainability.
The union’s position aligns with broader concerns raised by other stakeholders, who argue that overburdening the oil and gas sector, Nigeria’s primary revenue sources could have far-reaching consequences.
PENGASSAN affirmed its commitment to engaging constructively in the legislative process, ensuring that its members’ interests and the sector’s viability are protected.
What’s Next?
As the National Assembly continues deliberations, all eyes will be on the outcome of the public hearings. The oil and gas industry, a critical pillar of Nigeria’s economy, faces a pivotal moment that could shape its future trajectory.