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Oil Exploration In The North May Increase VAT Generation In The Region

As of today, northern Nigeria has no working crude oil extraction industry. Efforts are ongoing to achieve this feat as the exploration continues. The National Bureau of Statistics announced that Bauchi, Gombe, Taraba and other states in the north have the least Value Added Tax (VAT) generation due to low economic growth and investments. There is a high chance that the presence of the crude oil extraction industry in the region will boost the investment and productivity of the entire region.

States that have crude oil resources enjoy 13% derivations of the capital income raised from the sale of crude oil. This is apart from the tax paid by oil companies and other contributions being given to host communities. The federal government was very tactical to commence the oil exploration projects in the northern part of the country. This will definitely boost the country's crude oil exportations thereby generating more funds to finance capital projects across the country.

Northern states where oil exploration activities are ongoing may get to enjoy the 13% derivations like their counterparts in the southern region of the country. There will be a massive inflow of direct foreign investments to these states because crude oil is one of the major natural resources that is sought worldwide. States like Bauchi will get to generate more income from taxes, development levies etc.

It is unfortunate that the Nigerian National Petroleum Company (NNPC) had to suspend all exploration activities in Borno state years ago after the attack and kidnap of workers by the dreaded Boko Haram terrorists. The NNPC is yet to fix a date for the continuation of the project.

(Photo Credit: Premium Times)

The ongoing oil exploration going on in Bauchi and Gombe state is indeed a game-changer to the national economy. Recently, the Organisation of Petroleum Exporting Countries announced that Nigeria has lost its position as the top oil exporter in Africa. This revelation has raised concerns among economic analysts which elicited conflicting reactions from various segments of the country.

Content created and supplied by: Rasheeed (via Opera News )

Bauchi Gombe National Bureau of Statistics Nigeria Taraba

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