The Federal Government has recently introduced VAT exemptions for a range of energy products, including diesel, Liquefied Natural Gas (LNG), Compressed Natural Gas (CNG), and electric vehicles, as part of efforts to lower prices.
Finance Minister Wale Edun stated that these steps are aimed at reducing the cost of living, boosting energy security, and accelerating Nigeria’s shift towards cleaner energy sources.
As outlined in an official Gazette from the Ministry of Finance titled; VALUE ADDED TAX (MODIFICATION) ORDER, 2024, 63 items are now excluded from VAT collection by the Nigeria Customs Service (NCS), the Federal Inland Revenue Service (FIRS), and other relevant agencies.
According to the official Gazette, the exclusion of VAT from Automotive Gas Oil (AGO) also called diesel would become effective from October 1, 2024, while other items would be implemented by the relevant agency with approval from the Minister of Finance.
The VAT rate in Nigeria is 7.5% according to 2020 and excludes businesses with less than N25 million turnover in one year.
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The 69 items are;
CNG/LPG Dual Fuel Vehicles
Dedicated LPG Vehicles and CNG/LPG Dual Fuel Vehicles
Parts, and semi-knocked down units (for assembly) of CNG and LPG Buses
Parts, and semi-knocked-down units (for assembly) of Electric Vehicles
Electric Vehicles
Electric Vehicles Battery
Electric Vehicles Charging System
Electric Vehicle Solar Charging System
LPG/CNG Conversion Kits
CNG Cylinders.
CNG Cascades
CNG Dispensers
Gas Generators
CNG Trucks (Bobtails and Bridgers; fixed axle and semi-trailers)
Steel Pipes
Steel Valves & Fittings
SS Tubes & Fittings
Storage Tanks (all sizes)
Regulators
CNG Pumps and Compressors (all types)
Steel
Pressure Relief Valves
Hydraulic press/Rolling machine
Heat Treatment Equipment
Liquid Level Guage
Pumping Housing and Motors
Regulator Body
Pressure Guage
Truck Chassis
Metering and Measuring Equipment (including weighbridges, filling scales)
Dispensing equipment (dispensing scales, nozzles, gas filling systems)
Safety Features (emergency shutoff valves, pressure relief valves, excess flow valves, breakaway couplings,quick release couplings)
Gas water heaters
Gas burners for industry
Gas boilers
Gas washing machines and dryers (launderettes) Household or laundry-type washing machines, including machines which both wash and dry.
CNG, LPG and Cyrogenic Tubes, pipes and hoses, and fittings thereof (for example joints, elbows, flanges) of plastics.
CNG truck heads
Gas Leak Detectors
Gas air conditioners
Cylinder refurbishment equipment
Blending skid/unit.
Odourizing unit
Chromatography unit (GC)
LNG Liquefying Equipment, Heat Exchangers, LNG Vapourizers, Regassification Plant, Liquefied CNG, Compression Terminals.
LNG Plant, Machinery, Pumps, Compressors, Filters (Including Gas Filters), Weighing Machines, Valves & Equipment.
Cyrogenic Storage Tanks, Liquefied CNG Conversion tanks
Pipes, Piping Fittings, Flanges used for Liquefied Natural Gas processing
Electrical Equipment, including Cables for Liquefied Natural Gas processing
Stell Plates, Angles, Bars for Liquefied Natural Gas Processing
LNG Related Chemicals
Biogas Digester
Biogas Compressor
De-sulphurization units
Dryer
Distillation columns for processing biofuels
Bio-ethanol refinery equipment
Fermentation Tanks
Biofuel related Chemicals, Enzymes and Reagents
Liquefied Petroleum Gas
Compressed Natural Gas
Feed Gas
Automotive gas oil
Sources: Nairamatrics.
