IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 11 NO. 2 2025
DOI: 10.56201/jafm.vol.11.no2.2025.pg288.316

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Tax Mix and Net Investments of Listed Oil and Gas Firms in Nigeria

Akwa, Ubong Monday, Uwah Uwem Etim, PhD, Imoh Kingsley Ikpe, PhD

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Abstract

Taxation plays a vital role in shaping corporate financial decisions and investment capacity, particularly in capital-intensive industries like oil and gas. In Nigeria, the tax mix comprising company income tax (CIT), tertiary education tax (TET), capital gains tax (CGT), and withholding tax (WHT) serves as a key revenue generation tool while influencing firms' net investment. This study examines the impact of tax mix on net investment in listed Nigerian oil and gas firms. Employing an ex-post facto research design, data were collected from the annual reports of seven purposively selected firms listed on the Nigerian Exchange Group as of December 31, 2023. Panel least squares analysis was conducted using STATA 14. The results indicate that CIT (coefficient = 1.985, p = 0.000) and TET (coefficient = 14.339, p = 0.000) positively and significantly affect net investment, with TET having the strongest effect. Conversely, CGT exerts a non-significant negative effect (coefficient = -64.679, p = 0.757), while WHT significantly reduces net investment (coefficient = -13.466, p = 0.017). A comparative analysis confirms a statistically significant difference in the effects of CIT, TET, CGT, and WHT (F-statistic = 11.23, p = 0.000). The study concludes that the tax mix significantly affect net investment in Nigeria’s oil and gas sector, necessitating balanced corporate tax policies. It recommends enhancing transparency in TET utilization, revising CGT policies, and mitigating WHT-related liquidity constraints to promote sustainable sectoral investment.

keywords:

Tax mix; Company income tax; Tertiary education tax; Capital gains tax; Withholding

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