PETROLEUM PROFIT TAX AND PERFORMANCE OF LISTED OIL AND GAS FIRMS IN NIGERIA

Abstract

This study examined the effect of petroleum profit tax on the performance of listed oil and gas firms in Nigeria. In achieving this objective, the ex-post facto research design was employed and secondary data were collected from the annual reports of 6 listed oil and gas firms involved in the upstream sector in Nigeria covering 2012-2018. Simple linear regression technique was used to analyze the data using Eviews to determine the effect of the independent variable (Petroleum Profit Tax) on the dependent variables (Return on Assets and Earnings per Share). Findings indicate that petroleum profit tax has a significant positive effect on earnings per share of listed oil and gas firms in Nigeria. However, petroleum profit tax has insignificant positive effect on return on assets of listed oil and gas firms in Nigeria. Based on the findings from this study, it was recommended that the Government should ensure that the tax system and rate in Nigeria are convenient for tax payers. This will reduce the incidences of tax avoidance, reduce the impact on profitability, thereby increasing shareholders' wealth. Furthermore, the Government should ensure that the revenue generated from petroleum profit tax is well utilized for the development of the economy and the general wellbeing of the citizenry.