On the other hand, the tax makes the good in fact more expensive to produce for the seller. This means that the business is less profitable for a given price level and the supply curve shifts upwards. Second, the higher cost of producing the good reduces the quantity supplied at any given price.
What is petroleum profit tax?
Petroleum profit tax (PPT) PPT is a tax on the income of companies engaged in upstream petroleum operations in lieu of CIT. 50% for petroleum operations under production sharing contracts (PSC) with the Nigerian National Petroleum Corporation (NNPC).
What are the royalty rates for oil and gas?
Petroleum royalties are levied on petroleum production onshore, within coastal waters and the North West Shelf Project. The rate of royalty is normally set at 10% of the wellhead value for a primary production licence and 12.5 per cent of the wellhead value for a secondary production licence.
What kind of tax does a petroleum project pay?
Petroleum Resource Rent Tax (PRRT) The PRRT is a secondary tax, based on a project’s profitability, and applies to all petroleum products from a project, such as crude oil, natural gas, liquefied petroleum gas condensate, but not value added products, such as liquefied natural gas.
How are the costs of a petroleum project determined?
Usually at the beginning of a petroleum project, expected operating and capital costs are itemised by a prospective producer. Post-wellhead percentages are then agreed between the State Government and the producer for each cost item.
How are royalties collected in the United States?
Generally, there are three systems used for the collection of petroleum royalties: Petroleum Resource Rent Tax (PRRT). Wellhead and resource rent royalties are administered and collected under State and Commonwealth legislation.
