Artificial Intelligence (AI) and Petroleum Profit Tax Administration in Nigeria Economy

Abstract

This study examines the impact of Artificial Intelligence (AI) adoption on Petroleum Profit Tax (PPT) administration in Nigeria. The study looks into the level of AI deployment, the types of AI technologies now in use, their perceived efficacy, simplicity in usage, associated problems, and their impact on tax compliance and revenue collection. Data gathering was done with 98 individuals, who are officers in tax agencies, compliance officers, and AI professionals. Descriptive statistics and multiple regression analysis were used to assess the link between AI adoption and important tax outcomes. The findings showed that, while overall AI adoption is limited, techniques like machine learning, predictive analytics, and robotic process automation are becoming more popular. AI was discovered to greatly boost compliance efforts, improve the accuracy of tax reporting, and positively affect revenue predictions and audit results. The regression findings demonstrated that AI-powered data analytics and reporting systems had a statistically significant impact on PPT income production and tax compliance. However, constraints such as a lack of technical skills, aversion to change, and expensive implementation costs remain important obstacles. The study further discovered that when effectively applied and supported, AI will change tax administration. It suggests capacity building, enhanced infrastructure, data governance, and regulatory reforms to optimize the use of artificial intelligence in tax operations within Nigeria's petroleum sector.