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.