American International Journal of Social Science

The Effect of Petroleum Profit Tax on the Profitability of Listed Oil and Gas Companies in Nigeria
D. O. GBEGI Ph.D; J. F. ADEBISI Ph.D; BODUNDE Tosin

Abstract
This study examines the effect of petroleum profit tax (PPT) on Profitability of oil and gas firms in Nigeria, in line with the objectives of this study, secondary data were obtained from financial statement of ten (10) selected oil and gas firm covering the period of 2011 to 2015. Panel data was deployed and both descriptive statistics and multiple regressions technique employed to establish the effect of PPT rate on Profitability oil and gas firms. Petroleum profit tax was found to have significant effects on the Profitability of oil and gas firms with the Adjusted R2 of 95%. The study revealed that taxes paid by oil and gas industries have a downward effect on profitability of oil and gas industries. Following the outcome of this study, it is therefore concluded that higher tax rate cause reduction in Profitability of oil and gas firms in Nigeria for the period 2011 to 2015. It is recommended that Government should reduce the tax rate to enable oil and gas firms strive especially during this economic recession.

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