In a bold move to revitalize Nigeria’s oil and gas sector, the Federal Ministry of Finance has introduced a series of major fiscal reforms designed to enhance the industry’s global competitiveness. Announced on its official X handle, the ministry revealed two key fiscal incentives aimed at driving investment and fostering sustainable growth in the sector.
The Honourable Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, unveiled the following initiatives:
Value Added Tax (VAT) Modification Order 2024
Notice of Tax Incentives for Deep Offshore Oil & Gas Production as per the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
The VAT Modification Order 2024 introduces exemptions on a range of critical 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 exemptions are poised to lower the cost of living for Nigerians, bolster the nation’s energy security, and accelerate its transition toward cleaner and more sustainable energy sources.
Moreover, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production offers significant tax reliefs for deep offshore projects, marking a strategic effort to position Nigeria’s deep offshore basin as a top destination for global oil and gas investments. This initiative is expected to attract major industry players, paving the way for increased exploration, production, and innovation in Nigeria’s energy landscape.
These reforms align with President Bola Ahmed Tinubu’s broader economic agenda, outlined in Policy Directives 40-42, which prioritize investment-driven policies to strengthen key sectors of the economy. The administration’s commitment to sustainable development in the oil and gas industry reflects its vision to enhance Nigeria’s role as a global leader in energy production while fostering economic resilience and growth.
With these fiscal incentives in place, Nigeria is set to unlock new opportunities, boost investor confidence, and ensure a brighter future for the nation’s energy sector.
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