Petroleum Taxes
Calculator
Estimate Nigerian petroleum tax obligations under the NTA 2025 — Hydrocarbon Tax and CIT on upstream, midstream, and downstream operations.
Petroleum Operation Details
Petroleum Taxation Under the NTA 2025
The NTA 2025 replaced the Petroleum Profits Tax Act (PPTA) and Deep Offshore Act with a unified tax framework. Petroleum operations are now subject to Hydrocarbon Tax (HT) and Company Income Tax (CIT), with rates varying by sector. The old PPT rate of 85% for JV operations has been replaced with a maximum combined rate of 60% for upstream companies.
Upstream Operations
Upstream companies (exploration and production) pay Hydrocarbon Tax at 30% plus CIT at 30%, for a combined effective rate of up to 60%. This is a significant reduction from the old PPTA regime where JV operations were taxed at 85% and PSC operations at 50%. Capital allowances are available for exploration and development costs.
Midstream and Downstream
Midstream operations (refining, gas processing, LNG) pay HT at 15% plus CIT at 30%. Downstream operations (distribution, marketing, retail) pay CIT only at 30% with no Hydrocarbon Tax. The 4% Development Levy applies to all sectors if the company is classified as standard (turnover above ₦100M).
Petroleum Tax Rates by Sector (2026)
NTA 2025Frequently Asked Questions About Petroleum Taxes in Nigeria
The NTA 2025 repealed the PPTA and introduced a two-tier system: Hydrocarbon Tax (varying by sector) plus Company Income Tax at 30%. The combined maximum rate for upstream operations is 60%, a significant reduction from the old 85% JV rate.
No. Gas processing is classified as midstream and pays Hydrocarbon Tax at 15% plus CIT at 30% (combined 45%). Oil exploration and production (upstream) pays HT at 30% plus CIT at 30% (combined 60%). Downstream gas distribution pays CIT only.
The NTA 2025 provides graduated incentives for deep offshore and frontier area operations, including enhanced capital allowances, investment tax credits, and extended loss carry-forward periods. Specific rates depend on water depth and development phase.
Yes. The 4% Development Levy applies to all standard companies including petroleum operators with turnover above ₦100 million. It is charged on assessable profits before capital allowances.
PSCs are now subject to the same Hydrocarbon Tax plus CIT framework as other upstream operations. The old 50% PPT rate for PSCs no longer applies. Cost oil and profit oil splits remain governed by individual contract terms.
Yes. Tax losses from petroleum operations can be carried forward indefinitely under the NTA 2025, though there may be annual utilisation limits depending on the sector and specific contract terms.
Royalties on petroleum operations remain payable under the Petroleum Industry Act (PIA). They are separate from Hydrocarbon Tax and CIT. Royalty rates vary by terrain: onshore, shallow water, deep offshore, and frontier areas each have different schedules.
Yes. Payments for services, equipment hire, and other qualifying transactions attract WHT at standard rates (5% for contracts, 10% for professional services). Dividends paid by petroleum companies also attract 10% WHT.
Need Professional Advice?
Our tools provide estimates. Connect with a verified tax professional for complex scenarios.