The federal government has exempted 41 items from paying Value Added Tax (VAT) and import duties as part of fiscal incentives for the presidential gas for growth initiative.
The Minister of Finance and the Coordinating Minister of the Economy, Wale Edun made this known in a circular issued on December 7, 2023.
He said the exemption of the 41 items was in line with President Bola Tinubu’s commitment to improve the investment climate in Nigeria and to increase the utilisation and supply of gas in the domestic market.
The circular reads: “Pursuant to Part 1, Section 5 of the Customs and Excise Tariff Act, which grants an import Duty Waiver on machinery, equipment and spare parts imported into Nigeria for the utilisation of Nigerian gas (Gas Utilization Waiver’), the importation of all equipment related to Compressed Natural Gas and Liquefied Petroleum Gas into the Nigerian market shall attract zero percent (0%) import duty rate.
“The eligible Compressed Natural Gas and Liquefied Petroleum Gas equipment covered by the existing Gas Utilisation Waiver is outlined in the attached Appendix i.
“Consequently, the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) are hereby directed to apply a zero percent (0%) Value Added Tax (VAT) rate on the following items; .
“Feed Gas for all processed gas; Compressed Natural Gas; Imported liquified petroleum gas; Compressed Natural Gas (CNG) equipment components, conversion and installation services ; Liquified Petroleum Gas (LPG) equipment components, conversion and installation services
“All equipment and infrastructure related to the expansion of Compressed Natural Gas (CNG), Liquified Petroleum Gas (LPG) and the Presidential CNG Initiative, including conversion kits.”
It added that all applications for Import and Customs Duty exemption in relation to Compressed Natural Gas equipment shall require a letter of support from the Office of the Special Adviser to the President on Energy.”
It stressed that the importation of LPG under HS Codes 2711.12.00.00, 2711.13.00.00 and 2711.19.00.00 are exempt from import Duty and Value-Added Tax. :
“As a result, all Debit Notes issued to Petroleum Marketers who have imported LPG using codes 2711.1.2.00.00 and 2711.13.00.00 from August 26, 2019, to the present date should be withdrawn by the Nigeria Customs Service in line with the previous approval,” it added
It noted that the implementation of the tariff review for the CNG and LPG sub-sector takes immediate effect from the date of this circular.