LEGAL FRAMEWORK FOR PETROLEUM ADMINISTRATION AND TAXATION IN NIGERIA: A LEGAL APPRAISAL OF CONFLICTING LEGISLATIONS

Abstract

The Revenue from crude oil activities in the upstream sector are ordinarily taxed under Petroleum Profits Tax (PPTA) but for the enactment of the Petroleum Industry Act ( P I A) which has now incorporated the use of  Companies Income Tax Act in taxing petroleum operations. Petroleum Profit Tax accounts for the major revenue earning for the Federal Government of Nigeria, this makes it imperative for an effective administration and control of the sector by the federal government. Recently a new regime for the petroleum administration, Petroleum Industry Act, 2021, was introduced with an amendment of the Petroleum Act, 2004.The new Act introduced host communities Development Trust Fund, Petroleum Fiscal Industry Framework, Hydrocarbon tax and others. Most importantly, while amending Petroleum Act and incorporating some of the changes in taxation of the sector, they failed to realize the need to amend the legislation for the taxation of the industry which is the Petroleum Profit Tax Act. It does appear that the Act while trying to address old problems ended up creating new ones. Doctrinal method of data collection was used and analytical approach adopted in examining the research materials including statutes, judicial decisions, text books, journal articles and internet materials. It revealed that the language of the Act is ambiguous and imprecise. It did not define the frontier basin to be distinct from host communities. Fundamentally, the amendment made Petroleum Industry Act estranged from the people and stakeholders in the oil and gas industry in Nigeria. There is need for further amendment of the petroleum Industry Act to bring it inconformity with the other tax legislations: the Petroleum Profit Tax Act and the Constitution.