Nigeria’s federal government has made a significant move to boost the country’s economic growth by exempting 63 key items from Value-Added Tax (VAT).
This decision is part of a broader fiscal policy and tax reform aimed at supporting various sectors, including clean energy, transportation, and oil and gas.
The announcement was made by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, via a post on X (formerly Twitter).
Oyedele revealed that the new fiscal measures include extending VAT suspension on diesel and adding VAT exemptions on items crucial for advancing clean energy and sustainable transportation
Some of the exempted items include vehicles running on compressed natural gas and liquefied petroleum gas (CNG/LPG), electric vehicles (EVs), and parts for their assembly. The exemption also covers critical components and equipment for electric vehicles, biogas production, and liquefied natural gas (LNG) processing.
These exemptions aim to encourage investment in green energy, reduce costs for businesses and consumers, and promote sustainable transportation option. The government’s VAT exemptions also support the oil and gas sector while fostering innovation in clean energy technologies.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, unveiled these fiscal reforms, which include the VAT Modification Order 2024 and the “Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order 2024
The move is expected to attract foreign investment, reduce the overall cost of investment, and spur the growth of small and medium-sized enterprises (SMEs) in clean energy technologies.
