In a bid to boost Nigeria’s energy and oil sectors, President Bola Tinubu’s administration has introduced new Value Added Tax (VAT) exemptions on critical energy products and infrastructure, alongside tax incentives for deep offshore oil and gas projects.
The announcement, made on Wednesday, revealed that Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment will now be exempt from VAT, offering significant financial relief to these sectors..
Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, emphasized that these measures, known as the VAT Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, are part of a broader strategy aimed at revitalizing Nigeria’s oil and gas industry.
He added that these tax breaks are in line with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024, which aims to attract more investment to Nigeria’s energy sector and make the country a key player in global oil and gas markets.
According to a statement from the Federal Ministry of Finance, these new fiscal policies are designed to reduce the cost of living, strengthen energy security, and facilitate Nigeria’s transition to cleaner energy sources. The tax reliefs on deep offshore projects are specifically geared towards positioning Nigeria’s offshore oil basins as prime destinations for international investments.
These reforms underscore the Tinubu administration’s commitment to fostering sustainable economic growth and enhancing Nigeria’s competitive edge in the global energy landscape.
