FG Removes VAT On Key Products to Cut Energy Costs, Boost Clean Energy Transition, and Attract Global Investments with New Tax Reforms
The Nigerian government has unveiled a bold move to reduce the cost of living by removing Value Added Tax (VAT) on key energy products, including diesel, Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG), and electric vehicles. The new VAT exemption, announced by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, on Wednesday, is set to drive down prices and accelerate the nation’s transition to cleaner energy sources.
Key Energy Products to Benefit from VAT Exemption
The VAT Modification Order 2024 covers a range of vital energy products and infrastructure, including:
- Diesel
- Liquefied Petroleum Gas (LPG)
- Compressed Natural Gas (CNG)
- Electric Vehicles
- Liquefied Natural Gas (LNG) infrastructure
- Clean Cooking Equipment
According to Edun, the VAT exemption aims to reduce living costs, bolster energy security, and speed up Nigeria’s shift to greener energy alternatives. The initiative aligns with the administration’s commitment to sustainability and economic growth.
Tax Incentives to Boost Oil and Gas Investments
In a further move to drive economic growth, the government has introduced new tax incentives for deep offshore oil and gas production. The initiative, part of the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024, is designed to make Nigeria’s deep offshore basin a leading hub for global oil and gas investments.
Edun emphasized that these reforms are part of broader policy initiatives spearheaded by President Bola Ahmed Tinubu, aimed at enhancing Nigeria’s competitiveness in the global energy market.
The latest tax relief measures aim to position Nigeria as a key player in the global oil and gas sector, ensuring sustainable growth in the energy industry.
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