The Federal Government has announced significant tax exemptions for a range of energy products, including diesel, Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG), electric vehicles, and more, in an effort to reduce prices and promote cleaner energy sources. The exemptions, outlined in the VAT Modification Order 2024, are part of the government’s broader strategy to lower the cost of living, enhance energy security, and accelerate Nigeria’s transition to a greener economy.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed the exemptions in a statement on Wednesday, emphasizing their potential impact on reducing the burden on consumers and businesses. The move is expected to provide relief to Nigerians struggling with rising energy costs, particularly in the wake of recent fuel price hikes.
Read Also: MEMAN Urges FG to Concession Nation’s Refineries
In addition to the VAT exemptions, the government has introduced tax incentives for deep offshore oil operations and gas production, as outlined in the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024. These incentives aim to attract foreign investment to Nigeria’s deep offshore basin and position the country as a global leader in oil and gas exploration and production.
The tax reforms are part of a broader series of investment-focused policy initiatives championed by President Bola Ahmed Tinubu, in line with Policy Directives 40-42. The government’s commitment to fostering sustainable growth in the energy sector and enhancing Nigeria’s global competitiveness in oil and gas production is evident in these measures.
Read Also: FG Hands Over 64 CNG Buses to Labour Unions, NANS
The federal government’s ongoing tax reform initiative was launched after President Tinubu established a tax and fiscal policy committee in August 2023, headed by renowned tax expert Taiwo Oyedele. The committee is tasked with developing a new tax framework that can drive economic growth and development nationwide. As part of its mandate, the committee has proposed several reforms, including raising the Value Added Tax (VAT) and introducing tax exemptions for low-income earners.
The exemptions announced by the government are a significant step towards achieving its goals of reducing energy costs, promoting cleaner energy, and attracting foreign investment. These reforms are expected to have a positive impact on the Nigerian economy and improve the lives of its citizens.
