In a bid to combat the rising trend of divestments in Nigeria’s oil and gas sector, the Federal Government has unveiled a new fiscal regime that includes a variety of tax exemptions aimed at revitalizing the industry.
Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, announced the initiative through his Director of Information and Public Relations, Mr. Mohammed Manga.
The fiscal incentives are detailed in two key documents: the Value Added Tax (VAT) Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil & Gas Production. The VAT Modification Order 2024 introduces exemptions for essential energy products and infrastructure, such as Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
Additionally, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production outlines new tax reliefs specifically for deep offshore projects.
Mr. Edun emphasized that these concessions are expected to attract significant new investments into the oil and gas sector, aiming to lower living costs, enhance energy security, and facilitate Nigeria’s transition to cleaner energy sources. He expressed confidence that these measures would establish Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.
The reforms are part of a broader investment-driven policy initiative under President Bola Tinubu, aligned with Policy Directives 40-42.
