- in South America
The Nigerian government has introduced a new order aimed at stimulating investment and growth in the oil and gas sector. This order provides various tax incentives, exemptions, and remissions to companies operating in the industry. Key provisions include:
- Tax credits for non-associated gas greenfield developments.
- Investment allowances for gas utilization companies in the midstream sector.
- Potential incentives for deep-water oil and gas projects (details still pending).
The Value Proposition
This order is a significant policy shift intended to:
Attract investment: By offering tax breaks, the government aims to encourage more companies to invest in Nigeria's oil and gas sector.
Promote gas development: A primary focus is on boosting gas production and utilization to support power generation and industrialization.
Create jobs: Increased investment and activity in the sector are expected to generate employment opportunities.
Boost government revenue: While offering incentives, the government also anticipates increased revenue from the growing sector.
Strategies to Adopt
Review the order carefully: Understand the specific incentives applicable to your business and the conditions for claiming them.
Assess financial implications: Calculate the potential tax savings and benefits your company can derive from the order.
Update business plans: Incorporate the new incentives into your financial projections and strategic planning.
Explore investment opportunities: Consider expanding your operations or investing in new projects to take advantage of the incentives.
Engage with government: Build relationships with relevant government agencies to stay informed about policy developments and access necessary support.
On February 28, 2024, President Bola Ahmed Tinubu issued the Oil and Gas Companies (Tax Incentives, Exemption, Remission. Etc.) Order 20241 (the "Order") which granted specific tax incentives is aimed at unlocking investment in the Nigerian oil and gas industry.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
