Recent amendments to tax legislation in Nigeria have included a raft of tax incentives for deep offshore oil and gas activities and excluded certain energy products from Value Added Tax (VAT).
This was made known in a statement issued by the Ministry of Finance with regard to the Value Added Tax (VAT) Modification Order 2024 and the Deep Offshore Oil and Gas Production Tax Incentives Notice.
According to the VAT Modification Order 2024, the following products are exempted from Value-added tax: diesel, feed gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), electric cars, liquefied natural gas (LNG) facilities and clean cooking devices.
The Notice of Tax Incentives for Deep Offshore Oil & Gas Production presents new tax waivers that are meant to encourage international investments into Nigeria’s deep offshore ventures.
The Ministry further noted that these policy layers are meant to curb inflation, enhance energy security and fast track cleaner energy transition in Nigeria.
This, he stated, was a component of the broader policy shift and initiatives by President Bola Ahmed Tinubu to develop the energy sector and enhance the country’s global positioning in oil and gas.
Due to the ever-changing policies on investment and regulation in the oil and gas industry, Nigeria has seen a drop in investor confidence. It is the hope of the Federal Government that these measures will bring the sector back to life and encourage external capital flows.
