Nigeria Unveils Tax Breaks to Boost Oil and Gas Investments

Nigeria’s Federal Government has announced significant tax reliefs for deep offshore oil and gas production, aiming to attract foreign investment and revitalize the sector. Minister of Finance Wale Edun revealed that key energy products and infrastructure, including diesel, feed gas, and clean cooking equipment, will be exempt from value-added tax (VAT) payments.

Tax Incentives:

• VAT Modification Order 2024: Exemptions on diesel, feed gas, Liquefied Petroleum Gas, Compressed Natural Gas, electric vehicles, Liquefied Natural Gas infrastructure, and clean cooking equipment.
• Notice of Tax Incentives for Deep Offshore Oil & Gas Production: New tax reliefs for deep offshore projects.

These measures aim to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources. The initiative is part of President Bola Tinubu’s investment-driven policy initiatives, championed under Policy Directives 40-42.

Expected Outcomes:

• Position Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.
• Enhance energy security.
• Drive economic prosperity for all Nigerians.

This move comes as ExxonMobil and Seplat plan to divest, with President Tinubu promising ministerial approval in the coming days.

Nigeria seeks to reclaim its position as a leader in the global oil and gas market.