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It’s unfair for oil companies to extract crude oil in Bayelsa but workers pay income tax in Lagos - Governor Diri


Bayelsa governor, Douye Diri, says it is “unfair” that international oil companies (IOCs) extract crude oil in the state but their employees pay income tax to states where they have their headquarters.

Nigeria adopts PAYE tax, a Pay-As-You-Earn (PAYE) system to calculate the personal income tax of employees. 

Workers are expected to pay their income tax to the state in which they are residing. 

The governor spoke at the second edition of the Nigerian Content Development and Monitoring Board (NCDMB) research and development fair, themed ‘Creating Sustainable Collaboration in Research and Development for the Energy Sector’.

Diri, who was represented by his deputy, Lawrence Ewhrudjakpo, said it was meaningless for the oil companies to cite insecurity as their reason for not relocating their headquarters to Bayelsa.

According to him, Bayelsa state is more peaceful than many states in the country.

In March 2017, Vice President Yemi Osinbajo directed the IOCs operating in the Niger-Delta region to relocate their headquarters to their states of operation to mitigate tension in host communities.

Diri described the delay of the multinational oil companies as a great disservice and injustice.

He argued that the IOCs had no reason not to relocate to Bayelsa, considering the prevailing enabling environment in terms of security and improved means of transportation, especially the commencement of flight operations at the Bayelsa international airport.

“Bayelsa state government still feels short-changed, in terms of what we are getting from the oil and gas industry, despite the efforts we are making to ensure peace and tranquillity in the industry,” he said.

“We believe the relocation of the IOCs to Bayelsa state should not be further delayed.

“This is a pronouncement by the Vice President of our country, Prof Yemi Osinbajo, some three or four years ago. So, we believe the time for its manifestation has become very necessary.

“We strongly feel it is unfair for the IOCs to carry out their operations in Bayelsa, yet the PAYE income tax is collected in Lagos. That is a case of somebody eating the beans and asking another person to have diarrhoea.”

Governor Diri's comment is coming at this time some southern states are battling with the federal government in the collection of Value Added Tax (VAT).

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