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 forthe enactment of the Petroleum Industry Act ( P I A) which has now incorporated the use of Companies Income Tax Act in taxingpetroleum operations. Petroleum Profit Tax accounts for the major revenue earning for the Federal Government of Nigeria, thismakes it imperative for an effective administration and control of the sector by the federal government. Recently a new regimefor 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, Hydrocarbontax 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. Itdoes appear that the Act while trying to address old problems ended up creating new ones. Doctrinal method of data collectionwas 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 thefrontier basin to be distinct from host communities. Fundamentally, the amendment made Petroleum Industry Act estranged fromthe people and stakeholders in the oil and gas industry in Nigeria. There is need for further amendment of the petroleum IndustryAct to bring it inconformity with the other tax legislations: the Petroleum Profit Tax Act and the Constitution.