The Federal Government has introduced new incentives as part of its current fiscal reforms measures aimed at boosting the growth of the nation’s hydrocarbon resources industry.
Specifically, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on Wednesday in Abuja unveiled the two major fiscal incentives, namely the Value Added Tax (VAT) Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, in accordance with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024
By its provisions, 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 are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.
In addition, the Notice of Tax Incentives for Deep Offshore Oil & 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.
The reforms are part of a broader series of investment-driven policy initiatives of the President Bola Tinubu-led administration in line with Policy Directives 40-42.
They reflect the administration’s commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness in oil and gas production.
Experts believe that with these initiatives, Nigeria is firmly on track to reclaim its position as a leader in the global oil and gas market and that the fiscal incentives demonstrate the administration’s commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians.
