Nigeria’s Federal Government has just announced a new fiscal regime for the oil and gas sector, packed with tax exemptions to stop companies from pulling out. This move aims to attract a whopping $10 billion in investments . The new regime includes a range of incentives, such as removing the Corporate Income Tax Act provision for downstream and mid-stream companies that replace obsolete plants.
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, this evening.
The tax exemptions were contained in: Value Added Tax (VAT) Modification Order 2024; as well as Notice of Tax Incentives for Deep Offshore Oil & Gas Production, by the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024.
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.
In addition, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for deep offshore projects.
The Minister said concessions were expected to attract new and massive investments into the oil and gas and to revitalise the industry.
Nigeria’s finance minister, Wale Edun, also announced some exciting measures to boost the country’s oil and gas sector. The goal is to lower the cost of living, strengthen energy security, and accelerate the transition to cleaner energy sources . These measures include tax incentives for deep offshore projects, which are expected to attract massive investments and revitalize the industry.
He said the reforms were part of a broader series of investment-driven policy initiatives of President Bola Tinubu, in line with Policy Directives 40-42.
He said, “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.
Nigeria’s bold initiatives are indeed positioning the country to reclaim its spot as a leader in the global oil and gas market. The fiscal incentives demonstrate the administration’s commitment to sustainable growth, energy security, and economic prosperity for all Nigerians. This move is expected to attract significant investments, potentially up to $10 billion.
