The Federal Government has announced the removal of Value-Added Tax (VAT) on key energy products, including cooking gas, diesel, Compressed Natural Gas (CNG), and electric vehicles.
According to the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, the VAT Modification Order 2024 introduces exemptions on a range of key energy products and infrastructure. “These measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources,” Edun stated.
The VAT-exempt products and infrastructure include diesel, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), electric vehicles, Liquefied Natural Gas (LNG) infrastructure, and clean cooking equipment. Additionally, the government has introduced new tax incentives for deep offshore oil and gas production.
The Director of Information and Public Relations, Mohammed Manga, explained that the initiative is part of efforts to position Nigeria’s deep offshore basin as a premier destination for global oil and gas investments. “The notice of tax incentives for deep offshore oil & gas production provides new tax reliefs for deep offshore projects,” Manga noted.
This development comes as Nigeria struggles with high inflation, which stood at 32.15% in August 2024. The VAT removal is expected to provide relief to Nigerians struggling with the rising cost of living.
