The Federal Government has introduced new tax reliefs aimed at encouraging investments in deep offshore oil and gas production. This announcement includes the removal of value-added tax on the importation of essential energy products and infrastructure, such as diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment.
The initiative was announced by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, in a statement released on Wednesday. The statement, signed by the Director of Information and Public Relations, Mohammed Manga, emphasized that these measures would establish Nigeria’s deep offshore basin as a premier destination for global oil and gas investments, strengthen energy security, and accelerate the nation’s transition to cleaner energy sources.
This policy change coincides with recent divestment plans from ExxonMobil and Seplat, which President Bola Tinubu indicated would receive ministerial approval shortly.
In the statement, Edun highlighted the government’s commitment to revitalizing the upstream and downstream sectors through significant fiscal incentives. The newly introduced Value Added Tax Modification Order 2024 and Notice of Tax Incentives for Deep Offshore Oil & Gas Production were designed to align with the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
Manga elaborated that the VAT Modification Order 2024 provides exemptions on various key energy products and infrastructure, aimed at reducing living costs, enhancing energy security, and promoting cleaner energy sources in Nigeria.
The notice of tax incentives specifically targets deep offshore oil and gas production, creating new tax reliefs to attract investment in this area. These initiatives underscore the government’s dedication to sustainable growth and the economic prosperity of all Nigerians.
The statement further noted that these reforms are part of a larger set of investment-driven policies spearheaded by President Tinubu, reflecting the administration’s resolve to enhance Nigeria’s competitiveness in the global oil and gas market. With these bold measures, Nigeria is poised to reclaim its status as a leader in the global oil and gas sector, demonstrating an unwavering commitment to fostering sustainable growth and economic prosperity for all.
Written By; Christopher Emuakpeje