THE RELEVANCE OF PETROLEUM PROFIT TAX TO THE NIGERIAN ECONOMY

This study examined the impact of petroleum profit tax on economic growth in Nigeria. It also looked at the direction of causality among petroleum profit tax, money supply, interest rate, inflation rate and economic growth employing the method of Johansen co-integration and the Granger causality tests using data spanning the period 1978-2013. Results showed that petroleum profit tax has positive significant impact on GDP both in the short run and in the long run with ( ? = .1377812 ; t=1.71; P>|t|= 0.000) and (? =.0125105; z=-2.01, P>|z|= 0.000) respectively. Also, PPT does not granger cause GDP. Money supply impacted GDP positively in the short run but negative significant impact in the long run with (?=-.5674746; t= 3.02, P>|t|= 0.000) and (? = -9.70e-06; z = – 16.79; P>|z|= 0.000) respectively. It is recommended that, once petroleum profit tax impacted economic growth positively in the short run and n the long run, Government should also minimize or find ways of eliminating totally the widespread corruption and leakages in the petroleum profit tax administration