ATTENTION:
BEFORE YOU READ THE
PROJECT WORK, PLEASE READ THE INFORMATION BELOW. THANK YOU!
TO GET THE FULL
PROJECT FOR THE TOPIC BELOW PLEASE CALL:
08068231953,
08168759420
TO GET MORE PROJECT
TOPICS IN YOUR DEPARTMENT, PLEASE VISIT:
IMPACT OF PETROLEUM
SECTOR REVENUE AND ECONOMIC GROWTH
TABLE OF CONTENTS
Title
Page
Table of
Content
Abstract
CHAPTER ONE
1.0
Introduction
1.1
Statement of the Research Problem
1.2
Research Objective
1.3
Statement of Hypothesis
1.4
Scope of the Study
1.5
Relevance and Significance of the Study
CHAPTER TWO:
LITERATURE REVIEW
2.1
Overview of Taxation System in Nigeria
2.2
Tax Policy in Nigeria
2.3
Current Taxation Reforms in Nigeria
2.4
Petroleum Profits Tax
2.5
Brief Background of the Nigeria Oil Industry
2.6
Refining and Distribution of Petroleum Product
2.7
Petroleum Products Marketing
2.8
The Special Nature of Petroleum Industry
2.9
Industry Risk
2.10
High Cost of Investment
2.11
Long Load Time
2.12
The Objectives of Petroleum Taxation
2.13
Allowances and Incentive in the Nigerian
Petroleum
Industry
2.14
The Upstream
Sector
2.15
The Downstream Petroleum Sector
2.16
Legislature Governing Petroleum Activities in
Nigeria
2.17
Object of Taxation in under Developed Economy
with Nigeria as a Focus
2.18
The Role of Taxation in National Development
2.19
Tax Administration in Nigeria
2.20
Problems of Tax Administration in Nigeria
CHAPTER THREE:
RESEARCH METHODOLOGY
3.0
Introduction
3.1
The Population and Sample
3.2
Data Collection Method
3.3
Sources of Data
3.4
The Research Instrument
3.5
Data Analysis Method
3.6
Limitation of Study
CHAPTER
FOUR: DATA PRESENTATION AND INTERPRETATION OF RESULTS
4.1
Introduction
4.2
Presentation of Regression Result
4.3
Analysis of Regression Result
CHAPTER
FIVE: SUMMARY, RECOMMENDATION AND CONCLUSION
5.0
Introduction
5.1
Summary of the Finding
5.2
Discussion of Findings
5.3
Policy Recommendations
5.4
Recommendations for Future Research
5.5
Conclusion
Bibliography
Appendix
ABSTRACT
The basic reasons for
taxation in any economy cater on the need to raise revenue for economic and
social development and to guide taxpayer’s behavior.
Revenue from taxation
accounts for over 80% of government earnings in Nigeria, hence special
attention is often paid by tax experts, economists and the larger public on how
such revenue is being disbursed by government among the various economic
sectors that makes up the country.
This study,
therefore, attempts to evaluate the impact of taxation as a source of
governance paying special emphasis on petroleum profit tax over a period of
twenty years.
Data were collected
through questionnaires from respondents and statistical bulletins of the
Central Bank of Nigeria.
Result were presented
in tabular form. The ordinary least square method of data analysis was used for
the analysis of the data collected from the Central Bank of Nigeria (CBN). The
result of the findings showed that taxation as a source of government income
has significant impact on government revenue and expenditure, but despite such
contribution to government revenue generation the country’s GDP is still low.
As a result of this
finding, it was recommended that the government should take steps to meet its
socio-political and economic obligations to the citizenry as this will lead to
a growth in GDP.
Finally, the study
underscores the urgent need for the improvement of the tax information system
to enhance the evaluation of the performance of the Nigeria tax system and
facilitate adequate macroeconomic planning and implementation.
CHAPTER
ONE
1.0
INTRODUCTION
Taxation is one of
the oldest and most important source of government revenue in Nigeria. It has
been in existence even before the amalgamation of Nigeria in 1914 as a
political entity. It occupies a central place in the revenue generation of the
government and control.
Oil and crude oil
production and the revenue derived from it remains the prime mover of Nigeria
economy. as at today the country’s major balance of payment, exchange rate
policy, monetary and fiscal policies are dependent on revenue from oil.
Revenue from oil has
played a vital role in the execution of various national development plans and
still continue to do so. During the country’s first plan period (1962-1968),
the control of the oil industry was solely in the hands of the multinationals.
Oil royalties and petroleum by the oil companies under the Petroleum Profit Tax
Act of 1967 (as subsequently amended).
Initially, the 1957
Act established the basic principles of equal sharing of profit between
government and oil companies. This was achieved by fixing the rate of tax,
certain receipt of government in other forms, such as rent and royalties and
also duties charged by federal and state government in Nigeria. However
amendment in early 1967 introduced more favourable features as far as
government was concerned. Following the broad pattern already established in
those major oil producing countries whose governments were members of OPEC
(Organization of Petroleum Exporting Countries).
The industries also
contributes to the country’s balance of payment indirectly through the inflows
of foreign exchange to purchase Nigeria’s currency so as to meet local
commitment such as contractors and suppliers bills, salaries and wages and
labour dues paid on behalf of the suppliers of crude oil export.
The most noticeable
source of Nigeria revenue and foreign exchange earnings to the country is the
oil. This accounts for as much as 90% of the country’s total export earning and
total revenue of government.
With this, so much
attention is given to administration of petroleum profit tax. However the first
commercial production of oil in the world took place in Romania and the united
state in the 1850s.
Commercial discovery
of oil in Nigeria did not take place until 1950s although the shell BP had
earlier started some exploration work shortly before the Second World War.
Nigeria is the
largest producer and exporter of crude petroleum in Africa South of the Sabara.
Nigeria is a member
of the organization of petroleum exporting countries (OPEC).
It’s good quality
varies between light crude of 45o average of 32o API and
heavy crude of 21o API with weighted average of 32o API.
The Nigeria oil has
an incredible low sulphur content averaging only 0.2% of all other major
producer only Libya and Indonesia have qualities which may be regarded as
comparable.
Taxation of petroleum
operation started in 1959 with the enactment of PPT-Petroleum profit tax. The
petroleum profit department is responsible for the assessment and collection
of:
a)
PPT from exploration and producing companies.
b)
CIT from oil servicing companies.
c)
CIT from oil marketing and pioneer companies
d)
Education tax oil companies that are liable to either PPT or CIT.
No matter where an
oil producing or servicing company or pioneer company is located in Nigeria,
its tax matter are handed by the petroleum profit department, unlike the CIT
where the registered address of the business is used to determine registration.
The law and agreement that govern the PPT law collection are as follows:-
a)
PPT Act of 1959 as amended to date.
b)
Associated Gas Fiscal Arrangement (AGFA) of 1997, 1998 and 1999 Budget Decree
no. 18, 19 and 20 of 1998 provides more details.
c)
Production sharing control (PSC) of 1993. The PSC deals with exploration and
production of deep offshore territorial water of Nigeria. Decree No. 9 of 1999.
d)
Memorandum of Understanding (MOU) of 2000. It was signed in July 1999 and
effective from January 2000. By the provision of selection 55 of PPTA a company
that is liable to the PPT cannot be liable to CIT on the same income.
1.1
STATEMENT OF THE RESEARCH PROBLEM
Petroleum Profit Tax
is a tax paid by oil company involved in oil exploration and marketing. With
the production of 5,100 barrels per day in 1958, the volume of production in
the country. Multiplied impressively over the year to 2.3 million barrels per
day in 1979. Until recently when the problem of Niger-Delta began to affect
production by over 30% of cut in production. Little or nothing compared to what
is supposed to be realized from petroleum profit tax mainly because of these
factors.
·
The calculation of petroleum profit tax is demanding partly as a result of the
complexity of petroleum operation and partly because of the legislation in
Nigeria.
·
The administration of petroleum profit tax at the highest level has taken a
political dimension due to the enormous amount involved. This has been married
by corruption with most recent case of the Halliburton multinational bribery
scandal, which the case never, saw the light of the day in Nigeria.
·
The chargeable profit are based on national price (referred to as posted) and
partly because certain expenditure items are treated differently e.g. fiscal
allowance rather that deprecation.
The tax is also
reduced in respect of certain payments to government known as offsets in
Nigeria. Such as royalties on locally produced oil, non-productive rents
incurred by the company during that period and custom duties on essential items
and finally investment tax credit. This factor of tax reduction was before
January 1st 1995. Only companies engaged in petroleum operation pay
tax at posted price.
In the light of the
above, the relevant research questions are:
1.
What is the relationship between revenue from Petroleum Profit Tax (PPT) and
Gross Domestic Product (GDP)?
2.
Has the Petroleum Profit Tax Act of 1967 as amended for the collection and
usage by federal government increased the expected development of the nation in
general?
3.
What is the relationship between revenue from petroleum profit tax and total
tax revenue?
1.2
RESEARCH OBJECTIVE
The objective of this
research work includes the following:
1.
To examine the relationship between revenue from Petroleum Profit Tax (PPT) and
Gross Domestic Product (GDP).
2.
To examine if the Petroleum Profit Tax Act of 1967 as amended for the
collection and usage by the federal government has increased the expected
development of the nation in general.
3.
To examine the relationship between revenue from petroleum profit tax and total
revenue.
1.3
STATEMENT OF HYPOTHESIS
This aspect of the
research work is concerned with the acceptance or rejection of decision.
The research
hypothesis relevant to the above stated questions and objective were:
1.
There is a positive relationship between revenue from Petroleum Profit Tax
(PPT) and Gross Domestic Product (GDP).
2.
The Petroleum Profit Tax Act of 1967 as amended for the collection and usage by
federal government has increased the expected development of the nation in
general.
3.
There is a position relationship between revenue from petroleum profit tax and
total tax revenue.
1.4
SCOPE OF THE STUDY
This study covers the
adoption, implementation, impacts and problem of PPT collection and
recommendation on the (PPTA) in Nigeria. Also the subject matter of this study
is “Tax Administration from Petroleum Profit in Nigeria”.
The time period for the research is for the period of five years (2004 to 2008)
fiscal year.
The sample size is more concerned with Nigeria’s Federal Inland Revenue Service
of Edo State. Geographically, the study which will be specifically be
restricted to Edo and Delta States in Nigeria.
1.5
RELEVANCE AND SIGNIFICANCE OF THE STUDY
This research work is
being undertaken in order to bring to light the bright prospects and impact of
PPT as a source of revenue in Nigeria and as it affects the general price level
of economic activities in the country.
Much attention of
revenue generated in Nigeria is focused on the oil industry, which made this
research most significant. Yet it has not really attended it full potential
through it generates over 90% of government revenue.
Petroleum profit tax
administration is very significant in the sense that, if the proceeds are well
put into use and accounted for, it will yield almost double of what is expected
and the immediate impact of these will be enormous on all aspect of Nigeria
economy.
AFFILIATE LINKS:
Comments
Post a Comment