The Federal Government of Nigeria has introduced new tax relief measures aimed at stimulating investment in Nigeria’s oil and gas sector, particularly in deep offshore production.
As part of these incentives, the importation of essential energy products and infrastructure such as diesel, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), electric vehicles, and clean cooking equipment will no longer be subject to Value-Added Tax (VAT).
This announcement was made by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, in a statement released on Wednesday.
The statement, signed by the Director of Information and Public Relations, Mohammed Manga, emphasized that these reforms are designed to position Nigeria’s deep offshore oil and gas sector as a global investment destination, enhance energy security, and accelerate the country’s transition to cleaner energy sources.
The VAT exemptions come at a time when major oil companies like ExxonMobil and Seplat are planning divestments, which President Bola Tinubu has indicated will receive ministerial approval soon.
The statement read: “In its avowed determination towards ensuring a boost in the nation’s upstream and downstream sector, the Federal Government has introduced groundbreaking concessions aimed at revitalizing the industry.
“This is just as the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, today unveiled two major fiscal incentives aimed at revitalising Nigeria’s oil and gas sector: Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production, in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.”
Further explaining the reforms, Manga noted that the VAT Modification Order 2024 exempts a variety of key energy products and infrastructure from VAT, including diesel, feed gas, LPG, CNG, electric vehicles, LNG infrastructure, and clean cooking equipment.
These measures are aimed at reducing the cost of living, improving energy security, and promoting a cleaner energy transition.
Additionally, the tax incentives for deep offshore oil and gas production offer new reliefs to attract global investment to Nigeria’s offshore oil sector, with the goal of strengthening Nigeria’s position as a leader in the global energy market.
These fiscal measures are part of a broader series of policies championed by President Tinubu, reflecting the administration’s commitment to sustainable growth and boosting Nigeria’s global competitiveness in oil and gas production.
The government believes that these reforms will bolster the country’s energy sector and promote economic prosperity for all Nigerians.
