The Petroleum Industry Fiscal Bill 2018

A Bill establishes a new fiscal framework for the petroleum industry by revising taxation, royalty, and revenue-sharing arrangements. It targets oil and gas companies and federal revenue agencies to ensure a competitive environment. This aims to attract investment while securing fair government shares.

What Is This Policy?

A bill that proposed a new fiscal framework for the petroleum industry, including revised taxation, royalty, and revenue-sharing arrangements to replace the existing patchwork of petroleum fiscal legislation.

Who Does It Target?

Oil and gas companies operating under various fiscal regimes Federal Inland Revenue Service Federal Government revenue planners Petroleum industry investors and fiscal analysts

What Does It Aim to Achieve?

Create a unified, competitive, and transparent fiscal framework for the petroleum industry that attracts investment while ensuring the government captures a fair share of petroleum revenues across different operating environments.

Key Features

Hydrocarbon Tax: Proposed replacement for the Petroleum Profits Tax with a new tax linked to profitability Revised Royalty Regime: Updated royalty rates based on production volume, price benchmarks, and terrain Cost Recovery Rules: Standardized rules for allowable deductions and capital allowances Gas Fiscal Regime: Dedicated fiscal terms to incentivize gas development and utilization Frontier Basin Incentives: Enhanced fiscal terms to encourage exploration in frontier areas

Current Status

Rollout Stage: Enacted as part of the Petroleum Industry Act, 2021 Coverage: All petroleum operations including upstream, midstream, and downstream Lead Agency: Federal Inland Revenue Service and Federal Ministry of Finance Transition: Operators are transitioning to the new fiscal framework under the PIA

How to Access

The PIA 2021 contains the enacted fiscal provisions. Access the fiscal provisions of the PIA 2021 FIRS publishes implementation guidelines for petroleum taxation Operators should consult tax advisors on transition arrangements

Official Resources

Website: pia.gov.ng Contact: Federal Inland Revenue Service, Abuja

Legal Framework

Introduced under the legislative powers of the National Assembly vested by Section 4 of the 1999 Constitution (as amended) as one of four modular petroleum reform bills proposing fiscal changes. Sought to amend the Petroleum Profits Tax Act, the Companies Income Tax Act (CITA), and the Deep Offshore and Inland Basin Production Sharing Contracts Act. Superseded by the Petroleum Industry Act (PIA) 2021 fiscal chapters, which are now operative.