FG Introduces New Fiscal Incentives to Revitalize Oil and Gas Sector
The Federal Government has announced the introduction of two major fiscal incentives aimed at revitalizing Nigeria’s oil and gas industry, both upstream and downstream. The measures, unveiled today by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, are designed to boost investment, reduce costs, and encourage the transition to cleaner energy.
The incentives include the Value Added Tax (VAT) Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil & Gas Production under the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
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The VAT Modification Order exempts essential energy products and infrastructure from VAT, 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 expected to lower energy costs for Nigerians, strengthen energy security, and accelerate the shift to renewable energy sources.
Additionally, the tax incentives for deep offshore oil and gas projects are aimed at attracting foreign investment and positioning Nigeria’s deep offshore basin as a leading destination for global oil and gas ventures.
The new fiscal measures align with President Bola Ahmed Tinubu’s Policy Directives 40-42, underscoring the administration’s commitment to sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness.
With these initiatives, Nigeria is expected to bolster its oil and gas sector and reclaim its position as a global leader in energy production.
The announcement highlights the government’s efforts to foster economic prosperity and energy security across the country.
