An Appraisal of the Tax Regime in the Nigerian Petroleum Industry, Journal of Law and Policy
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Date
2023
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Journal of Law and Policy
Abstract
The revenue generated from the taxes paid by the petroleum companies in Nigeria is a major source of income powering the Nigeria economy. Over the year in its bid to regulate the petroleum industry the Nigeria government has enacted various tax laws including the recently enacted Petroleum Industry Act 2021 all with the sole purpose of generating more revenue for the state. The federal government of Nigeria on whom the Nigerian constitution vests ownership and control of mining of petroleum products in Nigerian uses taxation as one of its tools for the exercise of control over petroleum resources in respect of oil exploration, oil prospecting and mining of the petroleum resources in Nigeria. Taxation of the oil companies in Nigerian is propelled and geared towards ensuring that government generates enough revenue for the provision of the needed infrastructures and basic amenities to the Nigeria citizens. This article analysed the legal tax regime operating in the petroleum industry in Nigeria. It outlined and discussed the challenges faced by the government in administrating the taxes in the petroleum industry. It took into cognizance the instance that led to inadequate revenue generation on the part of the government, which is occasioned by multiple loopholes, inherent in our various tax laws which are usually exploited by the companies liable to taxes under them. It also discussed the various tax incentives available to the companies operating in the petroleum sector in Nigeria to encourage them to invest more of their resources and profits in Nigeria. The various tax statutes regulating taxation in the petroleum industry in Nigeria and other legal materials were also discussed. An in-depth analysis and reviews of the relevant provisions of the tax statutes and the legal materials consulted revealed. that the tax statutes were inadequate to address the tax needs of Nigeria for the generation of adequate revenue to fund its economy. We were able to observe that the tax statutes as they currently exist leave a lot of room for tax avoidance and tax evasion leading to low revenue generation by the tax authorities from the oil industry. The article is also of the view that multiple tax regimes in the petroleum industry in Nigeria have greatly contributed to tax avoidance and tax evasion and recommended that there is a need for a single enactment (legislation) ta harmonize all the tax regimes in the petroleum industry in Nigeria.
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Keywords
Tax Regime, Petroleum Industry
Citation
Kontagora, A.M, and Obienu, C. (2023). An Appraisal of the Tax Regime in the Nigerian Petroleum Industry, Journal of Law and Policy, 3(4). Pp. 90 - 111.