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Payments to governments
In some energy-producing countries, payments in taxes and royalties from oil and gas production can be the main source of government revenue. We have long supported greater transparency in such payments. This is the second year we are voluntarily publishing details of payments we have made to governments in some of the main countries where we operate.
Managing oil and gas revenues
Our operations generate revenue through taxes and royalties for governments around the world.
In 2012, we paid globally $21.0 billion in corporate taxes, and $3.6 billion in royalties. We collected $85.1 billion in excise duties and sales taxes on our fuel and other products on behalf of governments.
We encourage and support government efforts to use revenues from energy production effectively.
In developing countries, oil and natural gas revenues can bring widespread benefits, for example by funding schools and hospitals.
But if the money is poorly managed it can stimulate corruption, social inequality and conflict. Governments have responsibility for using these funds for social benefits.
We believe major companies like ours should be open on how much we pay to governments, and that governments should be transparent in how they use these funds.
We believe that such transparency promotes good government, helping to ensure that the billions of dollars the energy industry pays in tax benefits society as a whole, rather than a privileged minority.
Extractive Industries Transparency Initiative
We are a founder and board member of the Extractive Industries Transparency Initiative (EITI).
The UK government launched the initiative in 2002 to increase the transparency of revenues governments receive from oil and mineral activities.
This includes payments made by companies like ours, such as signature bonuses, taxes and royalties, and profits from state-owned companies.
Governments, agencies and companies in the oil, gas and minerals businesses support the initiative.
We were the first company in 2003 to publish the royalties, taxes and other payments made to the Nigerian government, with their permission and support.
We believe that the EITI’s multi-stakeholder approach (which includes governments, non-governmental organisations (NGOs), regulators, the public and companies) remains the most effective way of providing transparency regarding government revenues, for resource dependent countries.
Shell feels closer co-operation between tax authorities and major taxpayers is beneficial for all parties.
Such co-operation allows the authorities to receive revenues much more quickly and cheaply. And it provides energy companies like ours with greater certainty for their investments.