The Federal Government has announced a new fiscal regime with a wide range of tax exemptions aimed at revitalizing Nigeria’s oil and gas sector.
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun said the fiscal incentives were aimed at revitalizing Nigeria’s oil and gas sector, according to his Director, Information and Public Relations, Mr. Mohammed Manga, in a statement.
The statement issued by the Federal Ministry of Finance said:
“The VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure, including diesel, feed gas, liquefied petroleum gas (LPG), Compressed Natural Gas (CNG), electric vehicles, liquefied natural gas (LNG) infrastructure, and clean cooking equipment.
“These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.
“In addition, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for deep offshore projects.”
According to the statement:
“This initiative is aimed at positioning Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.
“These reforms are part of a broader series of investment-driven policy initiatives championed by His Excellency, President Bola Ahmed Tinubu, in line with Policy Directives 40-42.
“They reflect the administration’s strong commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness in oil and gas production.”
In another development, the Federal Government has gazetted the regulation on Withholding Tax (WHT) thereby setting the implementation date to January 1, 2025.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, disclosed this on his official X-handle on Wednesday.
It reads:
“The deduction of tax at source (Withholding) Regulations, 2024, has been published in the official gazette.
“The commencement date of the new regulations is 30th September 2024, while implementation begins on 1st January 2025 to allow for a minimum of 90 days notice required for tax changes in line with the 2017 National Tax Policy.”
According to Oyedele, the regulations grant rates reduction and full exemption from withholding tax to many businesses, including SMEs with annual turnover not exceeding N25 million.
He stated that there was a provision permitting the Federal Inland Revenue Service (FIRS), with the approval of Finance Minister and Coordinating Minister of the Economy, Wale Edun, to issue guidelines for the implementation of the regulations and, where appropriate, permit early application of the regulations from July 1, 2024.
“The essence of this provision is to enable persons who wish to adopt the regulations early to do so given that it is generally providing reliefs to businesses rather than imposing a burden.”
