June 22, 2024

Nigerian Government grants VAT, import levy exemptions to gas companies to boost economy – Wabote 

Oredola Adeola

 

The Nigerian Government has granted exemptions for gas companies from paying import duty and value-added tax on the import of Liquified Natural Gas manufacturing components and infrastructure based on an effort to make gas an enabler to the Nigerian economy.

 

 

Engr. Simbi Wabote, Executive Secretary of the Nigerian Content Development and Management Board (NCDMB), confirmed the exemptions in his intervention, during the session on the theme: “Deepening Nigerian Content in the Manufacturing Sector” at the 12th edition of the Practical Nigerian Content (PNC) Forum, in Bayelsa State, on Wednesday.

 

According to Wabote, the exemptions were granted by the Ministry of Finance and the Presidency, to boost investment in the LPG area of the oil and gas business.

 

 

He confirmed that the document was signed by the Presidency on November 28 and the Ministry of Finance on November 30, 2023.

 

 

The NCDMB’s boss made this known while responding to concerns raised during the session by Segun Ajayi-Kadir, Director General, Manufacturers Association of MAN) Daere Akobo, PANA Holdings and other panelist on some of the low-hanging manufacturing opportunities in the gas sector.

 

 

Meanwhile, Mr. Stephen Kilebi, the Director of Press and Public Relations at the Ministry of Finance, was unavailable for confirmation when EnergyDay contacted him. He did not respond to calls and messages sent directly to his contact on the subject matter.

 

 

EnergyDay’s investigation has revealed that the Nigerian Government has provided various fiscal incentives to investors in the gas sub-sector.

 

 

Already, the Petroleum Profit Tax Act (PPTA), Companies Income Tax Act (CITA), and the national gas policy, investors in the gas sub-sector are eligible for tax incentives such as Investment Tax Credit of 5 percent in the first two phases and 10 percent for LNG projects.

 

 

Gas transmission and distribution companies are charged Company Income Tax at the rate of 30 percent instead of the Petroleum Profit Tax (PPT) rate of 85 percent, while a PPT of 45 percent applies to LNG projects.

 

 

These tax incentives are aimed at spurring investment in the energy sector and contributing to the development of the country’s infrastructure.

 

 

The government’s focus on the domestic market, particularly in the areas of Liquefied Petroleum Gas (LPG) and Compressed Natural Gas, remains crucial to meeting the government’s AutoGas and LPG expansion targets.