AN INVESTIGATION INTO THE IMPACT OF THE  MULTINATIONAL OIL COMPANIES TOWARD THE NIGERIAN PUBLIC REVENUE
  ABSTRACT
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.
1.                  To check or rather analyze the profit of the company as it affects the income tax.
2.                  To determine if the multinational oil companies in Nigeria has contributed to the growth of national economy.
3.                  To know the impact of multinational oil company in Nigeria.
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.         
PROPOSAL
 An investigation into the impact of multinational of companies towards the Nigeria public revenue is just a project topic proposed to carry out in order to ascertain the  role or influence of one of these multinational oil companies (ELF) on the economic life of our country (Nigeria).The main obejcttives of this study are:
1.                  To check or rather analyze the profit of the company as it affects the income tax.
2.                  To determine if the multinational oil companies in Nigeria has contributed to the growth of nation economy.
3.                  To know the impact of multinational oil company in Nigeria.
Nevertheless for more than three decades oil has contributed more than two third (2/3) of Nigerian’s public revenue and as a matter of face this oil in Nigeria is exploited mainly by the multinational companies apart from some contribution of Nigeria national petroleum corporation (NNPC).It is important to carry out a study into the activities of one of these multinational oil companies especially ELF to see their impact towards the Nigeria public revenue.Moreover in carrying out this research:It is proposed to visit the multinational oil company in order to collect analyze and interpret data relating to their contribution towards the Nigeria public revenue. And their contribution towards the Nigeria public revenue.  And as well proposed to visit the manager of ELF petroleum, residents of some of the communities where some multinational oil companies are operational and also collect analyze and interpret data form ministry of finance and central bank of Nigerian which will enable me to achieve my purpose of this study.Questionnaire for staffs of multination oil company is proposed to be prepared way carrying out the research work so as to know what will be their responses.
Constraint that may be encountered  why carrying out the research study are:
1.                  The huge financial  objective involved in the conduct of this study.
2.                  The time frame allowed for the conduct of this study which may have  some impact on he scope of this study.
3.                  The imposed undue restriction to the researcher’s movement/ requirements in the company where she is to obtain necessary data of information.
Finally  in all these constraint above believing God  the impact of the multinational oil company towards the Nigeria public revenue will be established at the end of my research work.                
TABLE OF CONTENT
CHAPTER ONE  
1.1              Introduction
1.2              Background of the study
1.3              Statement of problem
1.4              Aims of the study
1.5              Objective of the study
1.6              Research questions
1.7              Formulation of hypothesis
1.8              Scope/ limitation of study
1.9              Definition of terms
References  
CHAPTER TWO  
Literature review
2.1              Multinationals in Nigeria oil industry (the issue of nationalism)
2.2              Participants
2.3              Economic policies and its circumvention
2.4              Visible contributions of multinational oil company to the economic of Nigeria
2.5              Invisible contribution of multinational oil companies
2.6              ELF donation of the flood victims
2.7              The role of multinational companies in developing countries
2.8              The role of capital in development theory
2.9              Welfare effects of development concepts
2.10          The role of technology
2.11          Issues and challenges of Nigeria’s petroleum industry
2.12          Declining exploration
2.13          Off-shore and non-delta prospects
CHAPTER THREE
 3.0      Research design
3.1       Area of study  
3.2       Population of the study
3.3       Samples size determination
3.4       Types of data used   
3.5       Location of data
3.6       Instrument of data collection
3.7       Method of data collection
3.8       Method of data presentation
3.9       Method of data analysis
CHAPTER FOUR   
Presentation and analysis of data
4.1              Presentation of data and analysis
4.2              Hypothesis testing
CHAPTER FIVE  
5.0       Findings conclusion and recommendations
5.1              Summary of findings
5.2              Conclusion
5.3              Recommendations
Bibliography   
Questionnaires for state of multinational oil company.
CHAPTER ONE
1.1              INTRODUCTION
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)                                                                                                 
1.2              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:
1.                  Shell petroleum development company of Nigeria
2.                  ELF petroleum
3.                  Cheavon petroleum
4.                  Mobile petroleum
5.                  Schlumberger
6.                  Texaco oil etc.
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).
PUBLIC REVENUE
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.
1.         Statutory allocation form federation account:
2.         Direct taxes
3.         Licenses and internal revenue
4.         Mining      
5.         Fees
6.         Earnings   and sales fees
7.         Rent on government property
8.         Interest and repayment federal
9.         Interest and repayment state government
10.       Armed forces
11.       Miscellaneous  
Their explanation in details are below:
1.         Statuary allocation from federation account: Currently the federal government receives 48.5% share of the federal account. Three major revenue heads make the federation account already detailed. In the summary of the heads of revenue are indirect taxes direct taxes and mining. They could alternatively be categorized as revenue form oil and non-oil.
2.         Direct taxes:    These cover the personal income tax of the armed forces polices forces residents of the federal capital territory foreign services officers etc. although these do not include those direct taxes that come under the federation account.
3.         Licenses and internal revenue:            The revenue derived form this sources is in respect of fees paid by individual for the provision of services and the granting of privileges by the government. The constituents of these sources of revenue are goldsmiths and gold dealers licenses, wireless and television licenses arms and ammunition licenses boats and canoe (small craft) licenses court fines and nationalization and citizenship the licensees confer the right on individuals and organization for the use of their properties taxed.
4.         Mining:            This includes mining fees penalties for arrears of rent prospecting right fees royalties  on tin, zinc ore, morium, marble lime stone quarriable and others here will likely coal.
5.         Fees:    This include court fees trade market fees company and business names fees  passports fees carriage fees and a host of others.
6.         Earning and sales fees:            These include proceeds from sales of publication proceeds form sales of goods  forfeits by price control board use of government and a host of others.
7.         Rent on government property:            This includes rent on federal government land, rent of quarters plot rents and aerodromes rent of bank premises in the federal government new secretariat.
8.         Interest and repayment federal:          This includes interest and payment of loan of federal government.
9.         Interest and repayment State government:  This represents the interest and payment of loans to state government.
10.       Reimbursement:          This represents reimbursement of audit fees, police secondment fees and reimbursement cost of collection of individual tax part reimbursement by state government.
11.       Armed forces: Armed forces rent sale of stores and clothing transport receipts and educational receipts
12.       Miscellaneous: This represents receipts which cannot be appropriately classified under other heads of revenue but are money realized or recovered by ministries and department in the process of carrying out their responsibilities. Revenue so earned are authorized to be used to meet expenditure. Examples this are refund of government sale of government shareholding penalty for loss of pensioners industry card.
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.
i. TAXES   
1.         Pay- as- you earn
2.         Direct assessment tax
3.         Direct assessment areas
4.         Tax collation agents debit
5.         Entertainment tax
6.         Sales/ purchase tax
7.         Capital transfer tax
8.         Withholding tax
9.         Urban building tax
10.       Cattle tax.
ii.         PENALTIES AND FINES     
1.         Penalties
2.         Appeals
3.         Court fines
4.         Court fines- traffic offences
5.         Court fines-customary court
6.         Forestry offenses
7.         Stamp duties and penalties  
iii.        FEES     
1.         Hospital fees
2.         Audit fees
3.         Pools proprietors from fees
4.         Pool agents form fees
5.         Import license fees
6.         Survey fees etc   
iv.        LICENSES
1.         Pools proprietors licenses
2.         Casinos licenses
3.         Pools agents licenses
4.         Gaming houses licenses etc.
v.         REFUNDS AND REIMBURSEMENTS      
1.         Printing on repayment
2.         Repayment of loans to parastatals and limited liability companies
3.         Repayment of local government etc.
vi.        REGISTRATIONS    
1.         Registration of poultry houses and hatcheries
2.         Registration of renewal of hospitals
3.         Registration of private schools
4.         Registration of renewal  of day care centers
5.         Replacement of lost registration certificate.
vii.       CONTRIBUTIES
1.         Group personal accident insurance scheme contribution
viii.      SALES
1.         Sales  of livestock products
2.         Sales  eggs and poultry investigation  
3.         Sales  of meat and livestock
4.         Sales  of drugs
5.         Sales  of fish and hire of fisheries equipment
6.         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.
i.          Internal  sources of  funds are:           Taxes, Rent , local licenses fees and fines rent  on local government property reimbursement etc.
ii.         External sources of revenue  include: Sate allocation donation federal allocation miscellaneous income.
1.3              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).     
1.4              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.
1.5              OBJECTIVE OF THE STUDY
The main objective of the study are:
1.                  To determine if the multinational oil companies in Nigeria has contributed to the growth of national economy.
2.                  To check or rather analyze the profit of the company as it affects their income tax.
3.                  To know the impact of multinational oil company in Nigeria.
1.6              RESEARCH QUESTIONS
1.                  To what extend was the analysis of the company profit affect its income tax.
2.                  What are the impact of multinational oil companies in the Nigeria public revenue?
1.7              FORMULATION OF HYPOTHESIS
The researcher wishes to establish the authenticity or otherwise of the following hypothetical statement.
1.         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.
2.         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  
1.8              DEFINITION OF TERMS
Definition of terms help us to know the meaning of the words used in the study of the project topic.
1.                  Inimical:    Condition that is not favourable but hostile
2.                  Multinational:        Company or business enterprise that have branches in several different countries
3.                  Revenue:   It is money that a government receives from taxes or that an organization, individual etc. receive from its business.
4.                  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