The Federal Government has announced the exemption of various energy products, including diesel, Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG), and electric vehicles, from value-added tax (VAT), as part of its efforts to stimulate the energy sector and lower the cost of living.
The news was disclosed by Mohammed Manga, Director of Information and Public Relations at the Federal Ministry of Finance, in a statement released on Wednesday. He noted that the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, introduced two key fiscal incentives aimed at reinvigorating Nigeria’s oil and gas sector.
According to Manga, the “VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.”
These measures, he explained, are intended to “lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.”
In addition to these VAT exemptions, the government has also introduced tax incentives for deep offshore oil and gas production. Manga elaborated that the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for offshore projects, a move designed to position Nigeria’s deep offshore basin as a leading destination for global oil and gas investments.
These reforms are part of a broader set of investment-driven policies championed by President Bola Ahmed Tinubu, under Policy Directives 40-42. They underscore the administration’s commitment to fostering sustainable growth in Nigeria’s energy sector and enhancing the nation’s competitiveness on the global stage.
“With these bold initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market,” Manga stated, adding that these fiscal incentives highlight the government’s “unwavering commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians.”
The administration’s proactive steps are expected to have a positive ripple effect across the energy sector, providing much-needed relief and contributing to a more stable economic environment.
