FG Introduces Comprehensive Tax Reforms to Revive Nigeria's Oil and Gas Sector

The Nigerian Federal Government has introduced a comprehensive fiscal regime offering significant tax exemptions.

Announced on October 3, by Finance Minister Wale Edun, these measures are designed to counteract the recent trend of divestments in the sector and attract new investments.

The initiative includes the "Value Added Tax (VAT) Modification Order 2024," which exempts several key energy products and infrastructure from VAT. These include Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.

Additionally, the government has rolled out tax incentives specifically targeting deep offshore oil and gas projects.

Minister Edun emphasized the broader goals of these reforms, stating, "These fiscal incentives demonstrate the administration’s unwavering commitment to fostering sustainable growth, enhancing energy security, and driving economic prosperity for all Nigerians."

He further highlighted that these measures are part of President Bola Tinubu's broader policy initiatives aimed at creating an investment-friendly environment and revitalizing Nigeria's economy.

The government anticipates that these tax breaks will not only lower the cost of living but also bolster energy security and accelerate Nigeria’s transition to cleaner energy sources.

By positioning Nigeria's deep offshore basin as a premier destination for global oil and gas investments, the administration aims to reclaim the country's leadership in the global market.