FG removes VAT on diesel, cooking gas, EVs to bolster energy security

The Federal Government has announced the removal of Value Added Tax (VAT) on diesel, Liquefied Natural Gas (LNG), also known as cooking gas, Compressed Natural Gas (CNG), and Electric Vehicles (EVs), among others.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, in a statement on Wednesday emphasised that the measures were designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.

“The VAT Modification Order 2024 introduces exemptions on a range of key energy products, including Diesel, Feed Gas, LPG, CNG, Electric Vehicles, LNG infrastructure, and clean cooking equipment,” he said.

He also announced the introduction of tax incentives for deep offshore oil operations and gas production, as outlined in the Oil & Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024, designed to establish the country’s deep offshore basin as a leading destination for global oil and gas investments.

Edun pointed out that these reforms are part of a broader series of investment-driven policy initiatives championed by President Bola Ahmed Tinubu, in line with Policy Directives 40-42.

“In addition, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production provides new tax reliefs for deep offshore projects. This is to position Nigeria’s deep offshore basin as a premier destination for global oil and gas investments.”

“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,” he said.