This study,AN INVESTIGATION INTO THE IMPACT OF THE MULTINATIONAL OIL COMPANIES TOWARD THE NIGERIAN PUBLIC REVENUE contains concise information that will serve as a framework or guide for your project work. The project study is well-researched for academic purposes and are usually provided in complete chapters with adequate References.
An investigation into the impact of multinational oil companies towards the Nigeria public revenue is just a project topic carried out to ascertain the role or influence of one of these multinational oil companies (ELF) on the economic life of our country (Nigeria).
The main objective of this study which was achieved at the end of this project work are.
This research work was implemented by using data collection from the staff members of ELF oil company by the use of questionnaires and use of secondary data and by oral interview.
Research methodology used as mentioned above especially the use of questionnaire was presented and analyze using chi-square (x2 square).
At the end of the research work was able to achieve my objective of delving into it. And recommendation was given by the staff of the ELF oil company.
TABLE OF CONTENTS
Background of the study
Statement of problem
Aims of the study
Objective of the study
Formulation of hypothesis
Scope/ limitation of study
Definition of terms
Multinationals in Nigeria oil industry (the issue of nationalism)
Economic policies and its circumvention
Visible contributions of multinational oil company to the economic of Nigeria
Invisible contribution of multinational oil companies
ELF donation of the flood victims
The role of multinational companies in developing countries
The role of capital in development theory
Welfare effects of development concepts
The role of technology
Issues and challenges of Nigeria’s petroleum industry
Off-shore and non-delta prospects
Area of study
Population of the study
Samples size determination
Types of data used
Location of data
Instrument of data collection
Method of data collection
Method of data presentation
Method of data analysis
Presentation and analysis of data
Presentation of data and analysis
Findings conclusion and recommendations
Summary of findings
Questionnaires for state of multinational oil company.
As a matter of fact the search for petroleum in the country started as early as 1908 when a German company the Nigeria Bitumen Corporation (limited) exploration in the Araromi area of western Nigeria. Their pioneering effort was interrupted by the out break of the first world war in 1914.
However in 1937 oil prospecting resumed in the country with shell D Arcy (the former of present awarded the side concessionary right covering the territory of Nigeria. Their activities were again affected by the second world war bit resumed in 1947. meanwhile, it was in 1956 that oil was discovered in commercial quantities of Olobiri in the Niger Delta after several years of oil prospecting and investing of over N30billion with this development shell started oil production and expiration from its Olobiri field in 1958.
Following the discovering of oil in the country other companies such as Mobil Agip Sc Frap (now ELF) Tennco and Amoseas (which we know today as Texaco/ Chevron) by 1961 began exploration right which has been formally granted to shell alone was extended to the new comers in line with the government policy of increasing the pace of oil exploration in the country Okigbo (1993).
So oil production and export from Olobirir field was first started in 1958 by shell at a production rate of 5, 000 barrels of crude oil per day. The quantity doubled the following year and crude oil exports form the country rose to 2.0miliom barrels per day in 1971.
In fact in 1972, 631,000,000 barrels were exported yielding more than N600 million in tax and royalties. As production continued, Nigeria attained the status of a major oil producer being presently ranked the 6th oil producer in the world and second in African after Libya.
Furthermore initially government interest was only limited to collection of royalties and other due (taxes) offered it from the oil companies and rudimental laws to regulate the activities of the oil companies and industry. This was due to fact that oil revenue was very insignificant in the economy before the late ninety sixties and also relative lack of trained personnel and expertise.
However immediately after the Nigeria civil war oil had become very important to our economy. So to strengthen and establish government control in the industry. The Nigeria oil corporation (INNOC) was established by decree in May, 1971 as an integrated oil company designated with powers to engage in all phases of oil production from expiration to marketing. Later in 1997 the corporation was amalgamated with he ministry of petroleum company (NNPX) Arthur A Nwankwo (1980).
Besides before October 1965, the country’s crude oil was refined overseas and all its processed oil need were thus imported. Consequently to reduce the money spent in such venture the country built its first refinery by October 1965 at Eleme Port Harcourt and as demand for more petroleum production increased more refineries were built as Warri and Kaduna including other petro- chemical complex as well as the Bonney liquefied national head project.
As a result of these development government decide on intensive participation in the oil industry activities. It is believed that if government had more say or involvement in the day to day activities of these companies. It could achieve its goal of rapid industries and commercial development of the country as well as better public revenue background.
Today the government has increased its participating interest in the oil producing companies to stand at 60% in shell Mobil ELE Agip Texaco and Panocean. Therefore having the right to about 70% of the total oil produced in the country.
In other words the joint venture activities between government owned Nigeria national petroleum company and the oil company here now shifted form mere monitoring of operations as practiced in the past to a more positive involvement in the day- to-day activities of these multi- national oil companies. David west Tom (1985)
BACKGROUND OF THE STUDY
By multi-national oil companies we simply refer to certain specific business outfit which have their parent headquarters located in the developed countries and then their subsidiaries operating in a number of countries. They can equally be termed transnational contextual framework.
As a matter of fact the parent company assumes greater control of the subsidiary not with standing some certain influences by the home government where the subsidiaries are located in fact the multi national oil companies control most of the meaningful economic activities in t he developing countries.
This control gives them very wide jurisdiction in the manipulation of the economic policies and circumstances of their country. Meanwhile our emphasis in this case is much on the multinational that participates on Nigeria oil industry among these companies are:
Initially when companies started their operation were in the country they were granted income tax relief (industrial development ordinance 1950). There were equally several amendment and laws which were put in place to encourage these companies towards a favourable operation and investment in Nigeria. With these opportunities, which were not obtainable in their home countries. So many multinational companies found Nigeria with her teeming population and abundant natural resources, a very fertile ground for operations.
Hence the scramble for oil prospecting which followed the discovery of oil granted to these companies was magnifying their profit. Assuming the reverse is the case their tax would have been divested as such expanding the economy and at the same time accruing much public revenue. Schwarzenberge (1957).
Revenue or funds is the live wire of any successful undertaking not only for the private sector but much also for the public sector.
The function which government must perform can only be discharged with resources in the from of money. This must be collected and used to serve the entire citizenry.
Financial regulations, financial legislations and the constitutions of the federal republic of Nigeria from the bedrock for revenue mobilization and expenditure.
Section 80 (1) of 1999 Nigeria constitution provides that “All revenue or other Monies raised or received by the federation (not being revenues or other money payable under this constitution or any other act of the national assembly into any other public fund of the federal established for a special purpose) shall be paid into and from one consolidated revenue fund of the federation.
Financial regulation 301 stipulates that “public fund shall include cash fixed fee receipt, tax tickets stamped promissory notes money collected by tax collectors.
The authorizing documents for various tax levies are the finance legislation and acts approved and issued from time to time.
In order to comprehend what public revenue is all about, brief explanation is done below.
When we are talking about public revenue we are just referring or emphasizing on government revenue that is incomes of the government. In other words we are looking at returns or yields from any kind of property which is directed which is directed to government or public coffers. Such revenue are mainly for the provision of social economic development. We should equally note that public or government revenue is quite different from national income which is the value of all the economic activities of the country within a specific period.
Conversely the government revenue itself contributed to the national income. Okigbo (1993).
SOURCES OF GOVERNMENT REVENUES
There are three tiers of government in Nigeria each with distinct sources and classification of revenue.
FEDERAL GOVERNMENT REVENUES SOURCES
The sources of federal government revenue form 1989 fall into twelve major revenue heads.
These are listed and as well explained below.
Their explanation in details are below:
SOURCES OF REVENUE TO STATE GOVERNMENT
Section 120 (1) of the 1999 constitution provides that “all revenues or other money raised or received by a state shall be paid into a from one CRF of the state. Such revenue to the state include.
Pay- as- you earn
Direct assessment tax
Direct assessment areas
Tax collation agents debit
Sales/ purchase tax
Capital transfer tax
Urban building tax
PENALTIES AND FINES
Court fines- traffic offences
Court fines-customary court
Stamp duties and penalties
Pools proprietors from fees
Pool agents form fees
Import license fees
Survey fees etc
Pools proprietors licenses
Pools agents licenses
Gaming houses licenses etc.
REFUNDS AND REIMBURSEMENTS
Printing on repayment
Repayment of loans to parastatals and limited liability companies
Repayment of local government etc.
Registration of poultry houses and hatcheries
Registration of renewal of hospitals
Registration of private schools
Registration of renewal of day care centers
Replacement of lost registration certificate.
Group personal accident insurance scheme contribution
Sales of livestock products
Sales eggs and poultry investigation
Sales of meat and livestock
Sales of drugs
Sales of fish and hire of fisheries equipment
Sales of insecticides and agricultural products etc.
SOURCES OF REVENUE LOCAL GOVERNMENTS:
The joint tax board set out the following sources of revenue of local government councils in Nigeria.
Internal sources of funds are: Taxes, Rent , local licenses fees and fines rent on local government property reimbursement etc.
External sources of revenue include: Sate allocation donation federal allocation miscellaneous income.
STATEMENT OF PROBLEM
It is my believe that there are not much study pertaining to the role of the multinational oil companies to ascertain the extent to which the have contributed to the public revenue of their host country. These multinational oil companies are major parities in our oil industry as such they are very important in the economic life of our country.
Most importantly we believe that they contribute immensely in the area of foreign exchange earning and other revenue generating aspect of the public revenue. Meanwhile though the actions of the multinational oil companies who give firm guarantee for their investment in sources countries as well as always stress economic development theories that preach the indispensability of the multinational oil corporations in the developing country. That does not mean the host countries cannot be will considered and properly centered for.
Since the greater percentage of our revenue is through the oil industry therefore the country is very much interest in what happens within the operation of these multinational oil companies. So proper analysis of their operation is needed with much emphasis on how much money they generate.
In fact the gap we intend to close or bridge in this study is to really ascertain the extend of financial growth of the company and see if it is commensurate with what they give the nation as taxes rents and royalties etc.
In other words we want to verify if really the activities of the multinational oil companies (with ELF in focus) are inimical or on the other hand favourable to the country revenue drive going by the huge profit they make oil production in Nigeria. Arthur A Nwankwo (1980).
AIMS OF THE STUDY
The aim of this work is to ascertain the role or influence of one of the multinational oil companies (ELF) on the economic life of our country. Hence the revenue accruing through their activities and to offer potent suggestion concerning thus if need be.
Moreover to help us to know how they pay their tax as well as other royalties that the company is expected to pay into the countries.
OBJECTIVE OF THE STUDY
The main objective of the study are:
FORMULATION OF HYPOTHESIS
The researcher wishes to establish the authenticity or otherwise of the following hypothetical statement.
H0: There is no significant impact or influence by the multinational oil companies on the country’s public revenue
H1: There is significant impact or influence by the multinational oil companies on the country’s public revenue.
H0: The profit of the company has no significant affect on their income tax
H1: The profit of the company has a significant affect on their income tax
SCOPE/ LIMITATION OF STUDY
An investigation into the impact of multinational oil companies towards the Nigeria public revenue ( the case study of ELF) is a study which focuses on the activities or operations of the ELF oil company Nigeria and law favourable or inimical their activities affect the pubic revenue of our country.
As we have already stated ELF petroleum Nigeria as one of the outstanding oil producing and marketing corporation with headquarters in France. Meanwhile there are various areas the company can contribute towards the growth of our economy which includes the infrastructure development aspect etc.
However my study scope in this case is limited to strictly the contribution of multinational oil company (ELF) towards public revenue of Nigeria.
Moreover it is important to note of Nigeria are not referring to the national income that is the total value of all the national income that is the country a given period. In this case we are emphasizing on the following levies such as:
Taxes: There are two types of taxes which government use prominently. These are direct and indirect taxes. Direct taxes are taxes imposed on personal individual or company which is regarded as a legal entity. Such taxes are individual income tax and company tax. Indirect taxes are those levied on goods and services such as import duties excise duties custom duties etc.
Grants: These are subsidies or assistance that could be extended to the country from other countries or organization like international monetary fund (IMT) world bank or internal sources such grants may be used for implementing capital or long-term projects.
Fees and charges: They are payment for royalties from oil motor vehicle licenses etc.
Rent and royalties: These payment are being made by the ELF oil company to the public account.
Returns from the direct investment of the federal government: These are being paid by the multinational oil company (ELF) for the good of public interest or to government coffer or public account.
How they are being paid and if they are properly paid are noted. Odoh N.N (1991) the huge financial objective involved in the conduct of this study to some extent affect the scope of the researcher’s work for instance this imposed conduct of this study has some measure of impact on the scope of this project. That is to say that the time period involved is in our view but not adequate for the purpose.
The data that were collected were analyzed manually instead of computer analysis and other modern equipment because the researcher could not lay hands on these equipment for extensive work to be carried out finance is very important.
DEFINITION OF TERMS
Definition of terms help us to know the meaning of the words used in the study of the project topic.
Inimical: Condition that is not favourable but hostile
Multinational: Company or business enterprise that have branches in several different countries
Revenue: It is money that a government receives from taxes or that an organization, individual etc. receive from its business.
Tax: This is a levy that is being paid by the individuals firm companies etc. to government so that it can pay for public services.
Have you made payment for this project? If YES, Get a Download Code by contacting our Customer Care.