ABSTRACT

The study investigated effect of petroleum profit tax on economic  growth of Nigeria with specific objectives to ascertain the effect of petroleum profit tax on real gross domestic product and total federal revenue.ItcollectedsecondarydatafromCentralBankofNigeria statistical bulletin 2016  and various Federal Inland Revenue Service reports. The study adopted expost facto research design and extracted data such as petroleum profit tax revenue, oil revenue, total federal revenue and real gross domestic product from1999 to2016soasto ascertain the effect of the revenue during the present political dispensation. The augmented Dickey-Fuller  unit root test conducted revealed that all the variables are integrated at first difference and therefore adopted the ordinary least-squares based multiple regression analysis to determine the relationship of the variables. The study found that petroleum profit tax has negative significant relationship with  real   gross domestic product of Nigeria while oil revenue has positive significant relationship with real grossdomesticproductofNigeria. It was established that petroleum profit tax  has a significant effect on economic growth of Nigeria.   It therefore recommends that Government should ensure that revenues from petroleum profit tax are effectively utilized to programmes that would enhance growth of the economy, there should be  expenditure policies that would ensure value for the money expended on programmes and policymakers on taxes should initiate and implement a mechanism that would curtail loopholes in revenue collected from petroleum profit tax in order to boost revenue generated from that source. 

TABLE OF CONTENTS

Title Page

 Dedication 

Declaration 

Certification 

Acknowledgements 

Table of Contents 

List of Tables

Abstract

CHAPTER ONE: INTRODUCTION

1.1.Background to the Study                                                                            1

1.2.Statement of the Problem                                                                           4

1.3.Objectives of the Study5

1.4Research Questions                                                                                     5

1.5.Research Hypotheses6

1.6Significance of the Study                                                                           6

1.7Scope of the Study7

1.8Limitation of the Study                                                                               7

1.9Definition of Terms7

CHAPTERTWO:REVIEWOFRELATEDLITERATURE

2.1Conceptual Framework                                                                               9

2.1.1.The ObjectivesofPetroleumProfitTaxinNigeria                               12

2.1.2.PetroleumProfitTaxinNigeria                                                              14

2.1.3.EffectofPetroleumProfitTaxonEconomicGrowthofNigeria19

2.1.4.ContributionsofPetroleumIndustrytoGrowth oftheNigerianEconomy                                                                                                 21

2.2.TheoreticalFramework22

2.2.1.SocioPolitical Theory                                                                             22 

2.2.2.ExpediencyTheory 23

2.2.3.BenefitReceivedTheory 23

2.2.4.Costof ServiceTheory 24

2.2.5.Faculty Theory 25

2.3.Empirical Review 25

CHAPTER THREE:RESEARCH METHODOLOGY

3.1ResearchDesign 35

3.2ResearchArea 35

3.3Sourceofdataandmethodofdatacollection 36

3.5DataAnalysis Techniques 36

3.4.ModelSpecification 37

CHAPTERFOUR:DATAPRESENTATIONANDDISCUSSIONOF

RESULTS

4.1.PresentationofData 39

4.2.AnalysisandDiscussionofResults 41

4.2.1.StationarityTestontheVariables 41

4.2.2.DescriptiveAnalysisandDiscussion 43

4.2.3.AnalysisandDiscussionontheEffectofPetroleumProfitTaxon RealGross DomesticProduct 46

4.2.4.AnalysisandDiscussionontheEffectofPetroleumProfitTaxon

TotalFederalRevenue                                                                             49

4.3.HypothesesTesting51

4.3.1.TestofHypothesisOne51

4.3.2.TestofHypothesisTwo                                                                          51 

CHAPTER FIVE: SUMMARY,  CONCLUSION  AND RECOMMENDATIONS

5.1.SummaryofFindings                                                                                 53

5.2.Conclusion                                                                                                  54

5.3.Recommendations                                                                                      56

References

Appendix