LEGAL FRAMEWORK FOR OIL AND GAS TAXATION IN NIGERIA: CHALLENGES AND PROSPECTS

Abstract

This study examines the legal framework for oil and gas taxation in Nigeria, focusing on its structure, challenges, and prospects for reform. As a major oil-producing nation, Nigeria relies heavily on oil revenue, which accounts for over 90% of foreign exchange earnings. The study analyzes key legislation, including the Petroleum Profit Tax Act (PPTA), Companies Income Tax Act (CITA), Value Added Tax Act (VATA), and Petroleum Industry Act (PIA) 2021, alongside the roles of institutions like the Federal Inland Revenue Service (FIRS) and Nigerian National Petroleum Corporation (NNPC). Using a doctrinal research methodology, it identifies challenges such as ambiguities in tax laws, overlapping jurisdictions, inefficient tax collection, corruption, and environmental degradation. The PIA 2021’s reforms are evaluated for their impact on fiscal efficiency. Findings reveal that while the PIA addresses some issues, implementation gaps and systemic inefficiencies persist. The study proposes legal, institutional, and policy reforms to enhance revenue generation and transparency. This research contributes to the discourse on fiscal policy in Nigeria’s oil sector, offering insights for policymakers, tax administrators, and stakeholder.