‘VAT modification, tax exemptions’ — FG introduces incentives to boost oil, gas sector

The federal government says it has introduced concessions aimed at revitalising the oil and gas industry to ensure a boost in Nigeria’s upstream and downstream sectors.

Wale Edun, minister of finance and coordinating minister of the economy, unveiled two major fiscal incentives on Wednesday.

According to a statement by Mohammed Manga, director, information and public relations at the ministry of finance, the incentives are aimed at revitalising Nigeria’s oil and gas sector.

The spokesperson said they include value-added tax (VAT) modification order 2024 and notice of tax incentives for deep offshore oil and gas production, in accordance with the Oil and 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,” Manga said.

“These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.”

He said the notice of tax incentives for deep offshore oil and gas production provides new tax reliefs for deep offshore projects.

“This initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments,” Manga said.

“These reforms are part of a broader series of investment-driven policy initiatives championed by His Excellency, President Bola Ahmed Tinubu, in line with Policy Directives 40-42.

“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, he said Nigeria is solidly on track to reclaim its position as a leader in the global oil and gas market.

The fiscal incentives, according to the ministry’s spokesperson, demonstrate the administration’s unwavering commitment to fostering sustainable growth, enhancing energy security, and fostering economic prosperity for all Nigerians.