Customs announces implementation of zero import duty, VAT on CNG, LPG equipment

The Nigeria Customs Service (NCS) has announced the implementation of a zero percent duty on compressed natural gas (CNG) and liquefied petroleum gas (LPG) equipment imported into Nigeria.

In a statement on Wednesday, the service said the move aligns with President Bola Tinubu’s commitment to enhancing Nigeria’s investment climate and increasing domestic gas utilisation.

The NCS said the measures are designed to ameliorate the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.

“In alignment with President Bola Ahmed Tinubu GCFR’s commitment to enhancing Nigeria’s investment climate and increasing domestic gas utilisation, the Nigeria Customs Service (NCS) announces the implementation of fiscal incentives under the Presidential Gas for Growth Initiative,” the statement reads.

“Pursuant to Part 1, Section 5 of the Customs and Excise Tariff Act, machinery, equipment, and spare parts imported for Nigerian gas utilisation are now subject to a zero percent (0%) import duty rate.

“This exemption encompasses all equipment related to Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) imported into Nigeria.

“In addition, the following items are now zero-rated for Value Added Tax (VAT): feed gas for all processed gas, Compressed Natural Gas, imported Liquefied Petroleum Gas, CNG equipment components, conversion and installation services, LPG equipment components, conversion and installation services, and all equipment and infrastructure related to the expansion of CNG, LPG, and the Presidential CNG Initiative, including conversion kits.”

The service said importers seeking to benefit from the incentives must obtain an import duty exemption certificate (IDEC) from the federal ministry of finance and a letter of support from the office of the special adviser to the president on energy.

The agency also said the importation of LPG under harmonised system (HS) codes 2711.12.00.00, 2711.13.00.00, and 2711.19.00.00 are exempted from both import duty and VAT.

“Consequently, all Debit Notes issued to petroleum marketers who have imported LPG using these codes from August 26, 2019, to date will be withdrawn by the NCS in line with previous approvals,” the service added.

The NCS affirmed its commitment to implementing the incentives effectively under the leadership of Bashir Adeniyi, its comptroller-general, calling on all stakeholders to ensure strict and prompt compliance.

On December 9, 2023, the federal government exempted the importation of LPG and its equipment from the payment of customs duty and VAT.

The move is expected to result in a drop in the cost of cooking gas in the country.