The Federal Government has announced a new fiscal regime with a wide range of tax exemptions in the industry.
The tax cut was revealed in two circulars that were made public by the Federal Ministry of Finance on Wednesday in Abuja.
The circulars were titled: “Value Added Tax (VAT) Modification Order 2024” and “Notice of Tax Incentives for Deep Offshore Oil & Gas Production.”
The circulars were said to be in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
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.
In addition, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for deep offshore projects.
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The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the concessions were expected to attract new and massive investments into the oil and gas sector and to revitalise the industry.
Edun said they were designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.
He expressed optimism that the initiative would reposition Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.
He said the reforms were part of a broader series of investment-driven policy initiatives of President Bola Tinubu, in line with Policy Directives 40-42.
He said: “They reflect the administration’s strong commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness in oil and gas production.
“With these bold initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market.
“These fiscal incentives demonstrate the administration’s unwavering commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians.”
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