CBN: Repatriated Oil and Gas Export Proceeds Can Settle Tax Obligations and Contractor Invoices In-Country


In a recent circular, the Central Bank of Nigeria (CBN) elucidated that repatriated oil and gas export proceeds can now be utilized within the country for the settlement of petroleum tax obligations and payment of contractors’ invoices.

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The circular, issued by Dr. Mahmoud Hassan, Director of Trade and Exchange at the apex bank, referenced TED/FEM/PUB/FPC/001/008 and dated May 6, 2024. It clarified that after the initial 50 percent of export proceeds cash pool allowed for oil and gas companies, the remaining 50 percent, mandated to be held in-country for at least 90 days before withdrawal, could now be utilized for various obligations.

Previously, the CBN had directed that only 50 percent of oil and gas export proceeds could be immediately repatriated, with the second half required to remain in the country for a minimum of 90 days.

However, the latest circular provides clarity, stating that the 50 percent held in-country for the specified period can be utilized by the firms. Banks are instructed to submit requests for cash pooling ahead of the expected receipt date, supported by necessary documentation, for approval by the CBN.

The remaining 50 percent of repatriated export proceeds can now be employed to settle financial obligations within Nigeria during the prescribed 90-day period.

Additionally, besides tax purposes and payment to contractors, the CBN outlined that these repatriated proceeds could be used for royalties, Cash Calls, loan repayment, and forex sales at the Nigerian Foreign Exchange Market.

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