The Federal Government has eliminated the Value Added Tax (VAT) on diesel, cooking gas, and other essential energy products.
This announcement was made on Wednesday by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, as he introduced two major fiscal incentives aimed at revitalizing Nigeria’s oil and gas sector.
According to a statement released by the Director of Information and Public Relations at the Ministry of Finance, Mohammed Manga, the incentives include the Value Added Tax (VAT) Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil and Gas Production. These are in line with the provisions of the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
The statement highlighted that the VAT Modification Order 2024 grants exemptions on several critical energy products and infrastructure, such as diesel, feed gas, liquefied petroleum gas (LPG), compressed natural gas (CNG), electric vehicles, liquefied natural gas (LNG) infrastructure, and clean cooking equipment. These exemptions are part of efforts to reduce the cost of living, boost energy security, and promote Nigeria’s shift towards cleaner energy sources.
Additionally, the Notice of Tax Incentives for Deep Offshore Oil and Gas Production offers new tax breaks for deep offshore projects. The aim is to strengthen Nigeria’s position as a leading destination for global oil and gas investments in the deep offshore sector.
These reforms, which fall under Policy Directives 40-42, align with the administration of President Bola Ahmed Tinubu’s goal of driving sustainable growth in the energy sector. The measures are intended to enhance Nigeria’s competitiveness on the global stage while fostering economic prosperity for all citizens.
Manga further stated that these initiatives are crucial steps in reestablishing Nigeria as a leader in the global oil and gas industry. The administration’s commitment to energy security and long-term economic growth, he noted, is evident in these bold fiscal incentives.
