Corporate Tax Mix and Capital Investment of Listed Oil and Gas Firms in Nigeria

Abstract

This study investigated the effect of corporate tax mix on capital investment of listed oil and gas firms in Nigeria, using data for the period of 2013-2024. The objective of this study were to: evaluate the effect of capital gain tax on capital investment of listed oil and gas firms in Nigeria; assess the effect of Petroleum profit tax on capital investment of listed oil and gas firms in Nigeria; assess the effect of education tax on capital investment of listed oil and gas firms in Nigeria; Panel least squared (PLS) method of data analysis was adopted because of its Best Linear Unbiased Estimators (BLUE) properties. The data for the variables used were sourced from annual report of the selected oil and gas firms in Nigeria. The variables were on capital gain tax, Petroleum profit tax, education tax and capital investment. The study adopted the descriptive statistics, correlation approach, as well as panel least square. E- View software was used for the analysis. The study found that Capital gain tax has negative and significant effect on capital investment of listed oil and gas firms in Nigeria. (T-test -3.002813, p=0.0007). Petroleum profit tax has negative and significant effect on capital investment of listed oil and gas firms in Nigeria. (T-test -2, 590932, p=0.0109). The study recommends that, Government should consider reviewing and moderating capital gain tax rates to reduce its negative impact on investment decisions. A more investment-friendly rate would encourage shareholders and firms to reinvest profits into productive capital projects. The petroleum profit tax structure should be re-evaluated to strike a balance between revenue generation and investment stimulation. Lower or more flexible tax rates, especially during periods of economic stress, can help improve the capital investment capacity of oil and gas firms.