ABSTRACT

 This study examines the effect of petroleum profit tax (ppt) on economic growth in Nigeria from 1990 to 2018. The objectives of the study were to examine the effect of actual petroleum profit tax and budgeted petroleum profit tax on economic growth in Nigeria. The methodology for the study is the combine of survey and ordinary least square where the multiple regression was employed to test for the hypothesis. These data on these variables were sourced CBN statistical bulletin. Some econometrics technique was employed like the augmented dickey-fuller unit root test, Johansen cointegration and the vector error correction model. The unit root result revealed that none of the variables were stationary at level, but at first difference, all the variables became stationary. The cointegrations result revealed that there is a long run relationship among the variables. The VECM result revealed that the appt has a positive and significant relationship with rgdp, while the bppt had a negative and significant impact on GDP. The r2 result revealed that 92% of the changes in the dependent variable are as a result of the changes in the explanatory variables. The remaining 8% are accounted for by the variable not in the model but captured by the error term. The Breusch-Godfrey serial correlation Im test revealed that the model is free from serial correlation. The study recommended that government should as a matter of urgency restructure the tax system in Nigeria to drive economic growth and development in the country. Revenue from tax should also be properly expended to provide basic amenities to the citizens who are paying the tax.