The aim of this paper is to examine the ownership, the legal framework as well as the basic components of the petroleum profits, which components are revenue, adjusted profits, assessable profit, chargeable profit, assessable tax and chargeable tax. This article focuses on the assessment of the petroleum profit tax under the Petroleum Profit Tax Act, Cap P 13, Laws of Federation of Nigeria, 2004 as well as judicial authorities regarding same. Nigeria’s economy is totally dependent on oil. The revenue from oil accounts for over 85% of the entire revenue of Government and about 95% of foreign earnings. Initially, Government’s interest in oil was only limited to the collection of royalties and other dues from the oil companies and making rudimentary laws to regulate the activities of the oil companies. However, with the discovery of crude oil in commercial quantities, the role of Government in the sector gradually progressed from mere regulatory to direct involvement in the oil exploration. The oil boom has led to more revenue through tax and royalties. It concludes that when the proposed Petroleum Industry Bill, currently under review at the National Assembly is eventually passed into law, it is believed that it will bring about the much desired development in the sector.
- Petroleum Profit Tax Act,
- petroleum profits,
- revenue/oil accounts,
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