AbstractThe impact of the tax regime on the non-renewable energy sector has been neglected in the current literature. The sector is reported to be at the heart of most oil and gas producing economies. Considering the immense contributions of this sector, the present study investigated the effects of royalty payments on petroleum profit tax evasion in Nigeria’s non-renewable energy sector. A survey, in the form of a questionnaire, was used to collect data from 312 oil and gas companies; while SPSS and PLS software were used to analyze the data. The results indicate that there is positive and significant relationship between tax rate, detection probability, and penalty, and petroleum profit tax evasion. Additionally, the result shows that there is a significantly negative relationship between royalty payment and petroleum profit tax evasion. The findings have significant policy implications for the non-renewable energy sector across the globe. The findings confirm the fact that higher tax rate, detection probability, and penalty, have a direct impact on petroleum tax evasion. The findings also call on policymakers to reconsider the level of royalty rates to a more reasonable level so as to reduce the extent of petroleum tax evasion among the oil and gas companies.