Petroleum Sector Tax Management and Government Revenue Optimisation in Nigeria

This study examines the management of petroleum sector taxes and their contribution to government revenue optimisation in Nigeria. The Petroleum Industry Act 2021 introduced a new fiscal framework for upstream and midstream oil and gas operations, replacing the longstanding Petroleum Profits Tax regime with a hydrocarbon tax and revised royalty structure. Understanding how these changes affect revenue optimisation for the Federal Government of Nigeria is of immediate professional and policy relevance. Using a mixed documentary and qualitative approach, the study analyses the PIA tax provisions, compares pre-and post-PIA revenue projections from the Federal Ministry of Finance, and conducts structured interviews with twelve petroleum tax professionals from leading energy companies and FIRS's large taxpayer office. Comparative analysis of fiscal regimes across African petroleum producers including Angola, Ghana, and Senegal provides additional context. The study expects to find that while the PIA introduces a more competitive tax framework likely to attract new investment, short-term government revenue may be compressed during the transition period as companies claim transitional deductions. Recommendations include establishing dedicated FIRS capacity for PIA compliance monitoring, publishing clear implementation guidelines for the hydrocarbon tax, and strengthening the Nigerian Upstream Petroleum Regulatory Commission's liaison with FIRS on revenue reporting. Keywords: petroleum tax, PIA, hydrocarbon tax, revenue optimisation, oil and gas.