Impact Analysis of Petroleum Profit Tax and the Economic Growth in Nigerian : 1985 - 2019

Abstract

The study titled impact analysis of petroleum profit tax and economic growth in Nigeria with a view of investigating the potential impacts of the revenues from petroleum profit tax on the growth of Nigerian economy on the basis of time series data for the variables such as economic growth proxied by real gross domestic product, petroleum profit tax, non-oil tax revenue and governance proxied by government accountability specified in the estimated models. Upon verifying the stationarity properties of the series of the variables, the study employed Cointegration and fully modified ordinary least squares as the techniques of analysis to reveals: the existence long-run relationship between petroleum profit tax and economic growth in Nigeria; petroleum profit tax impact positively on economic growth at a statistical significant level; governance impact positively on economic growth in Nigeria; while non-oil tax revenue impact negatively on economic growth in Nigeria. The study therefore recommends that: Reviewing the current administration of PPTA in Nigeria to reflect the international standard on the petroleum profit tax Act; According priority to non-oil sector so as to improve government earnings from other non-oil sectors; Deliberate investment of revenue from PPT to develop other non-oil sectors and; Full entrenchment of good governance in the administration of tax system in Nigeria.