Nigeria’s Federal Government Exempts 63 Items from Value-Added Tax
The Nigerian Federal Government has exempted 63 items from Value-Added Tax (VAT) to revitalize the oil and gas industry, boosting Nigeria’s upstream and downstream sectors. This announcement comes just two days after the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, introduced concessions to support the industry’s growth.
According to Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, the exempted items are listed in an official gazette, "Value Added Tax (Modification) Order, 2024," dated September 3, 2024.
The exemptions cover a range of items, including:
- CNG/LPG dual fuel vehicles
- Dedicated LPG vehicles and CNG/LPG dual fuel vehicles
- Electric vehicles and parts
- Gas generators
- CNG trucks
- Steel pipes and fittings
- LNG liquefying equipment
- Electrical equipment for Liquefied Natural Gas processing
The VAT modifications aim to incentivize investments in the oil and gas sector, making Nigeria a more attractive destination for international investors.
In addition to the exemptions, the federal government has introduced two major fiscal incentives: the VAT modification order 2024 and notice of tax incentives for deep offshore oil and gas production, in accordance with the Oil and Gas Companies (tax incentives, exemption, remission, etc.) Order 2024.
The new regulations take effect on October 1, 2023, with the provision for Automotive Gas Oil (AGO) to be deemed as having commenced on this date.
These moves are expected to create jobs, increase revenue, and enhance the overall economic development of Nigeria. With a focus on revitalizing the oil and gas industry, the country aims to achieve economic growth and prosperity for its citizens.
