The Rising Influence of Rising Affluence

[DewDiligence]

…Production Service (or Sharing) Contracts (PSCs) are used in Nigeria where the country receives royalties and taxes on a percentage basis, e.g., 5% royalty and 50% tax.

From a practical standpoint, does it matter to an E&P company what portion of the total 55% (in your example) is called a royalty and what portion is called a tax? I presume that both amounts are fully deductible to the company under GAAP. T.i.a.