For the development and growth of any economy, the provision of basic infrastructure is quite necessary. Among these are the provisions of schools, hospitals, construction of roads, bridges, railway lines, airports and seaports. Generally, government is saddled with the responsibility of providing some basic infrastructures for her citizens. In lieu of this, the government of any society seeks sources of fund to maintain the development, and meet the needs of its society. Meeting the needs of the economy call for huge funds which an individual or society can’t contribute alone. There are two ways of financing government expenditure in Nigeria; these are, through oil revenue and through non-oil revenue. The Nigerian government sources a large proportion of its total revenue from oil since Nigeria has been seen as a country rich with this natural resources. The petroleum industry generated about 82 per cent income for Federal Government while 18 per cent came from non-oil revenue. The Petroleum Industry constitutes a major source of income and occupies a strategic position in the economic development of Nigeria. For the past decades, the industry has been playing vital and dominant role to the economic growth of Nigeria, both in foreign exchange earnings and domestic income generation. One of the sources of petroleum income is the Petroleum Profit Tax, this is just among others, as royalties, rents, oil pipeline and license fees, signature bonuses penalty from gas flared, NNPC earnings from direct sales, proceeds from local sales of crude oil to NNPC, proceeds from export sales of crude oil and gas etc. are sources of petroleum income. But for the purpose of this research, the researcher will be focusing on an aspect of the sources of petroleum income, which is, petroleum profit tax (PPT).Petroleum refers to crude oil and natural gas or simply put, oil and gas. Petroleum, or oil and gas, production and export play a dominant role in the economy of Nigeria and account for about 70 per cent of the nation’s GDP and over 90 per cent of her foreign earnings. Nigeria has been seen to be the largest oil producing country in Africa and the eleventh in the world. Petroleum industry is the leading sector in the Nigerian economy. Oil being the mainstay of N-igerian economy plays a vital role in shaping the economic and political destiny of the country. The contributions of the petroleum industry to public expenditure has been phenomenal. Taxation is the system of collecting money by taxes i.e. the system by which taxes are imposed or the process or system of raising income through the levying of various types of taxes. Taxes are  levies imposed by government against the income, profit or wealth of an individual, partnership and corporate organization. From the definitions given it can be said that the main purpose of tax is to provide government with money to provide public services to citizens and it is necessary that all citizens, whether individuals or artificial bodies, pay taxes. The Petroleum Profit Tax Act (PPTA) is the tax law responsible for the governing of the taxation of companies engaged in petroleum operations 

and, the Act defines petroleum operations as “the winning or obtaining and transportation of petroleum or chargeable oil in Nigeria by or on behalf of a company for its own account by any drilling, mining, extracting or other like operations or process, not including refining at a refinery, in the course of a business carried by the company engaged in such operations, and all operations incidental there to and sale of or any disposal of chargeable oil by or on behalf of the company”

. The definition is applicable to the upstream sector of the petroleum industry; hence, only companies in the upstream sector are charged with petroleum profit tax (PPT).The importance of taxation on petroleum profits cannot be overemphasized as tax revenue derived from tax in petroleum profits contributes, largely, to the total tax revenue available to the Nigerian government. Petroleum profit tax generate about 42% income for federal government.


Reiterating the fact that taxation of petroleum profit is a source of revenue to the Nigerian economy in funding her government expenditure, but in Nigeria today the infrastructures, education, and health care services and other amenities are not showing the effective use of tax contributed by oil companies in the upstream sector. In Nigeria the citizens and companies avoid and evade tax because they do not know how revenue generated through tax is being spent by the government. Nigeria is one of the few countries in the world where it is fashionable to evade tax. The various structures which are required to work together to make tax evasion difficult are not properly coordinated.  Tax evasion is one of the major social problems inhibiting development in developing countries and eroding the existing welfare state in developed economies in the world. It has been observed that high profile companies in Nigeria do evade tax. And oil companies are included in this class of high profile companies. This observation says a lot about tax administration system in Nigeria both in its design and in the disposition of some oil companies towards taxation. This presupposes that there are legal framework put in place to punish tax evaders it perhaps raises a poser on the efficiency and effectiveness of tax laws and tax administration in Nigeria. The Nigerian government in an effort towards solving this problem had even gone to the extent of engaging the services of tax consultants. Despite the effort of government, tax evasion still persists, revenue derived from taxation of petroleum profits amounts to a great portion of total tax collections of the Nigeria government. The evasion of tax by oil companies could have a drastic effect on the development of the economy of Nigeria. Oil companies in Nigeria have, over the years, devised means of getting away with every breach of the law. Oil companies justify their actions due to the corrupt nature of the government; they perceive the tax officials and government as a whole embezzle the revenue derived from petroleum profit tax. Tax evasion in Nigeria is becoming uncontrollable; yet, the Nigerian government has failed to pay attention to the analysis of the major causes of tax evasion in its economy, especially the evasion of tax on petroleum profit since this is said to have a significant addition to the total collections of total tax collections. The petroleum profit tax structure, in Nigeria, has been characterized with tax evasion, tax avoidance, corruption and poor tax administration filled with loopholes. Hence, this research work is set out to provide answers and possible solutions to the problems already identified.


The following are the aim and objectives, which this study sets to achieve:

1. To identify if a significant relationship exists between petroleum profit tax and the capital expenditure of the Nigerian economy.

2. To identify if there are major differences in the perception of respondent groups on the major causes for avoiding petroleum profit tax.

3. To determine if the tax authorities are effective in the collection of petroleum profit tax (PPT).


Based on the aforementioned problems, the researcher is constrained to ask the following questions:

1. How significant is the relationship between petroleum profit tax (PPT) and the capital expenditure of the Nigerian economy?

2. To what extent are there significant differences in the perceptions of respondent groups on the major causes for avoiding petroleum profit tax?

3. To what extent are the tax authorities of Nigeria effective in the collection of petroleum profit tax (PPT). 


For the purpose of this study, the hypothesis testing shall be stated thus:

Hypothesis 1 

 HO: There is no significant relationship between petroleum profit tax and the capital expenditure of the Nigerian economy.

 H1: There is a significant relationship between petroleum profit tax and the capital expenditure of the Nigerian economy.

Hypothesis 2

 HO: There are no significant differences in the perception of respondent groups on the major causes for avoiding petroleum profit tax.

 H1: There are significant differences in the perception of respondent groups on the major causes for avoiding petroleum profit tax.

Hypothesis 3

 H0: The tax authorities are not effective in the collection of petroleum profit tax

 H1: The tax authorities are effective in the collection of petroleum profit tax


This study shall cover a selected government agency, which is, Federal Inland Revenue Service (FIRS) in Lagos State, Central Bank of Nigeria (CBN), KPMG accounting firm, Chevron Nigeria Limited.


The south western part of Nigeria is selected for this research. Primary data necessary for the research work will be gathered from Lagos state.while secondary data necessary for the research work will be gotten federal inland revenue service(FIRS) and central bank of Nigeria(CBN)


Data for this research work will be obtained between the years 2002 to 2011.

1.8 SITE

The project will be carried out in University of Lagos, akoka, Lagos State, Nigeria.


This study will only cover capital expenditures as an  economic growth. FIRS, ExxonMobil and KPMG will be the companies that will be visited for this study


The outcome generated from this research work will be of great significance to key players engaged in the shaping of the economy. Some of these key players include;

1. GOVERNMENT: This research will enable the government to cherish the importance of petroleum profit tax in the shaping of government expenditure in the 

2. economy. More attention will be given to the area of taxation as a result of this research work.

3. SOCIETY: It helps the society know the role petroleum profit tax plays in shaping of government expenditure in the economy. It also affects their thoughts towards government about the utilization of revenue gotten from petroleum profit tax.

4. RESEARCHERS: The research work can serve as a foundation or basis for other researchers who are willing to research along the same line. Future researchers can continue from where this research work stops.

5. PETROLEUM COMPANIES: It helps petroleum companies know how they play a vital role in shaping the destiny of the government expenditure of Nigeria’s economy and understand how remitting their taxes can be of great importance to the economy of the nation at large.

6. TAX AUTHORITIES: This research will enable tax authorities give attention to contentious areas in the taxation of petroleum profit and will enable them understand how these areas affect the standing of the Nigerian economy.

7. STUDENTS: It gives students a better understanding about petroleum profit tax and how It affects the government expenditure of the economy.


TAXATION: This is the process or system of raising revenue through the levying of various forms of tax.

TAX: This could be defined as a compulsory levy by the government of any country, through an appropriate agency, on incomes, goods, services and properties of an individual, partnership, executor, trustee and corporate body.

PETROLEUM: Any mineral oil relative hydrocarbon and natural gas existing in its natural condition, but does not include liquefied natural gas, coal, bituminous shale or other stratified deposits from which oil can be extracted by destructive distillation.

PETROLEUM OPERATION: is the winning or obtaining and transportation of petroleum or chargeable oil in Nigeria by or on behalf of a company for its own account by any drilling, mining, extracting or other like operations or process, not including refining at a refinery, in the course of a business carried on by the company engaged in such operations, and all operations incidental thereto and any sale of or any disposal of chargeable oil or on behalf of the company.

GOVERNMENT EXPENDITURE: It is a term used to describe money that a government spends. Expenditure occurs on every level of government from local city councils to federal organisation. Includes all government consumption and investment but exclude transfer payment made by the state.

TAX EVASION: Illegal practice where a person, organization, or corporation intentionally avoids paying his/her/its true tax liability. It is a deliberate act on the part of the tax payer not to pay tax due


Abiola, J. &. (2012). imppact of tax adminiatration on government revenue in a developing economy . a case study of nigeria international journal of business and social science.

Adegbie, F. &. (2011). company income tax and nigeria economic development. european journal of social sciences, 309-319.

akintoye, i. &. (2013). the effect of tax compliance on economic growth and development in nigeria. britishjournal of arts and social sciences.

amassoma, d. n. (2011). component of government spending and economic growth. journal of economics and sustainable development.

asabor. (2012). firs hunts tax evading oil companies. nigerian tribune.

chigbu, e. l. (2012). an empirical study on the casuality between economic groeth and taxation in nigeria. current research journal of economic theory.

chukwudi, n. (2012). challenges confronting nigerian economy AND THE WAY OUT. nigerain compass.

ebimobomei, a. &. (2012). petroleum profit tax and economic growth in nigeria. international journal of management sciences and business research.

enahoro, j. &. (2012). tax administration and revenue of lagos state government. research journal of finance and accounting.

fagbemi, t. u. (2010). the ethics of tax evasion: perceptual evidence from nigeria. european journal of social sciences, 360-371.

GIZ. (2010). addressing tax evasion and tax avoidance in developing countries. NPC government file.

igbeng, e. t. (2012). analysis of tax morale and tax compliance in nigeria. european journal of business anm=d management, 182-207.



RESEARCHWAP.COM is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • " is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • " is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing