Nigeria’s Federal Ministry of Finance has unveiled two major fiscal incentives aimed at revitalising Nigeria’s oil and gas sector on 2 October 2024.
These are Value Added Tax (VAT) Modification Order 2024, which has been published in the Official Gazette.
The Federal Ministry of Finance also released Notice of Tax Incentives for Deep Offshore Oil & Gas Production under the Oil & 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. In addition, the order grants VAT exemption on biogas and biofuel equipment and accessories for clean cooking and transportation.
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.
These reforms are part of a broader series of investment-driven policy initiatives in line with Policy Directives 40-42.
