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  • Service: Tax, International Corporate Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 10/3/2012

Nigeria - Parliament takes up petroleum industry bill 

October 3:   Nigeria’s Parliament has begun consideration of the Petroleum Industry Bill 2012 that, on enactment, would repeal both the current Petroleum Act and Petroleum Profits Tax Act—in addition to a number of other laws that currently govern the Nigerian oil and gas industry.

As introduced, the Petroleum Industry Bill 2012 would:


  • Replace the current petroleum profits tax with a hydrocarbon tax—changing the rules that apply for allowable and not allowable deductions, and for capital and production allowances (including investment tax credits and allowances)
  • Impose companies income tax on those companies engaged in upstream petroleum operations—to include any rents and royalties payable on upstream petroleum operations
  • Authorize the Minister for Petroleum Resources to issue regulations concerning the basis and percentage to be paid by companies engaged in petroleum operations
  • Retain provisions that any dividend paid out of profits and subject to a petroleum tax would not be subject to any further Nigerian tax (e.g., withholding tax, companies income tax, individual income tax)
  • Prohibit the flaring of natural gas after a “flare-out date” (to be established by regulations)
  • Establish new conditions for renewal of leases
  • Create a fund to be used for development of economic and social infrastructure of communities within the petroleum producing areas

Read an August 2012 report [PDF 348 KB] prepared by the KPMG member firm in Nigeria:
Petroleum Industry Bill 2012: Highlights of the Fiscal Provisions



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