ABSTRACT

The main aim of study is to examine the effect of petroleum profit tax on economic growth in Nigeria. The problems with Nigerian economy have been traced to failure of successive governments to utilize oil revenue and excess crude oil income in the development of other sectors of the economy effectively and efficiently. The ex-post facto research design was adopted and data collected from secondary sources. The collected data was analyzed using ordinary least square technique. The result revealed that actual petroleum profit tax has sign fricant effect on economic growth. The result also revealed that, budgeted petroleum profit tax has a signflcant effect on economic growth. There is a good relationship between the dependent variable GDP and independent variable petroleum profit tax. Finally, there is a sign /Icant relationship between petroleum profit tax and total revenue in Nigeria. Conclusively, based on the findings of the study, PPT has a positive impact on growth after a considerable lag. All the variables are statistically significant. The countries that performed PPT have a more per capita GDP level and are less dependent on the international trade. It is recommended that government should transparently and judiciously account for the revenue it generates through PPT by investing in the provision of infrastructure and public goods and services. It is expected that the more effectively and efficiently revenue is utilized by Government to create growth, employment opportunities and wealth in the economy, the more willing taxpayers would be to meet their obligations to the Government and discharge their duties in the overriding goal of achieving National Development. Finally, for the PPT policy to have a more significant impact on the revenue and economic development of Nigeria, Government should minimize or find ways of eliminating totally the widespread corruption and leakages in the petroleum profit tax administration.