The Nigerian Government has introduced new tax relief measures aimed at boosting investments in deep offshore oil and gas production.
This initiative also includes the removal of value-added tax (VAT) on the importation of 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.
Finance Minister and Coordinating Minister of the Economy, Wale Edun, announced these developments in a statement on Wednesday. The timing coincides with upcoming divestment plans from ExxonMobil and Seplat, which President Bola Tinubu has indicated will receive ministerial approval shortly.
Edun’s statement emphasized the government’s commitment to revitalizing the nation’s upstream and downstream sectors, highlighting two significant fiscal initiatives: the Value Added Tax Modification Order 2024 and the Notice of Tax Incentives for Deep Offshore Oil & Gas Production.
“The VAT Modification Order 2024 provides exemptions on a range of critical energy products and infrastructure. These measures are designed to reduce living costs, enhance energy security, and facilitate Nigeria’s shift towards cleaner energy solutions,” said Edun.
The Notice of Tax Incentives for deep offshore oil and gas production aims to position Nigeria’s deep offshore basin as a premier destination for global investments in the sector. The ministry underscored that these fiscal incentives demonstrate the administration’s dedication to sustainable growth, improved energy security, and economic prosperity for all Nigerians.
These reforms are part of a broader investment-driven policy framework championed by President Tinubu, reflecting the administration’s commitment to enhancing Nigeria’s global competitiveness in oil and gas production.
The statement concluded that these initiatives are pivotal in reclaiming Nigeria’s status as a leader in the global oil and gas market.
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