In a move which is expected to result in a significant drop in the cost of cooking gas in the country, the federal government of Nigeria has exempted the liquefied petroleum gas (LPG) and its associated equipment from payment of customs duty on imports and the value-added tax (VAT).
The Cable reports that this was made known by the Ministry of finance in a letter (dated November 28,2023) to the Special Adviser to the President on Energy, the Comptroller-General of the Nigeria Customs Service (NCS) and the Chairman of the Federal Inland Revenue Service (FIRS).
The Minister of finance and coordinating minister of the economy, Mr Wale Edun signed the letter which stated “In line with His Excellency, President Bola Tinubu’s commitment to improving the investment climate in Nigeria, increasing the supply of LPG to meet local demand, reducing market prices and promoting clean cooking practices, I hereby affirm Presidential directive dated July 29, 2022, with reference number PRES/88/MPR/99. Accordingly, the importation of LPG utilizing HS Codes 2711.12.00.00, 2711.13.00.00 and 2711.19.00.00 is exempt from import duty and Value-Added Tax. Consequently, the importation of LPG shall incur a 0% duty rate and 0% VAT rate, effective immediately.”
In addition, the ministry directed the NCS to comply with the presidential directive dated the same July 29, 2022, and withdraw all debit notes issued to petroleum marketers who have imported LPG “using codes 2711.12.00.00 and 2711.13.00.00 from August 26, 2019, to the present date”.
Other items exempted from VAT and import duty payment includes LPG cylinders, LPG cascades, gas leak detectors, steel pipes, steel valves and fittings, LPG dispensers, gas generators, LPG trucks, among others.
The Customs Service and Federal Inland Revenue Service were further instructed to comply with directive pending its official gazetting.
It will be recalled that the federal government in 2019, had removed VAT on LPG in Nigeria, only to reintroduce the tax in 2021, when it commenced the implementation of the 7.5 percent tax on imported LPG, exempting locally manufactured gas.
