President Bola Tinubu has signed four key tax reform bills into law, a significant milestone in Nigeria’s drive to improve its fiscal framework, attract long-term investment, and modernize its energy sector.
The newly enacted laws, part of the administration’s broader economic transformation agenda, are expected to stimulate over $6 billion in fresh investments—particularly in the oil and gas industry—while providing greater regulatory clarity and investor confidence.
Among the major reforms now codified into the Nigeria Tax Act are:
- Presidential Directive 40, which offers fiscal incentives for Upstream, Midstream Gas, and Deep Offshore projects.
- The 2024 VAT Modification Order, which exempts Compressed Natural Gas (CNG), Liquefied Petroleum Gas (LPG), and other clean energy products from value-added tax.
- The 2025 Upstream Petroleum Cost Efficiency Order, designed to reduce operational costs and enhance efficiency in the upstream petroleum sector.
These directives, previously issued via executive orders, now carry the full weight of law, insulating them from reversal by future administrations and signaling Nigeria’s commitment to policy consistency and economic reform.
According to the President’s Special Adviser on Energy, Olu Verheijen, the legal codification of these incentives has already triggered significant capital inflows into Nigeria’s oil and gas sector.
“With their codification, the administration has delivered long-term certainty and regulatory clarity, ensuring these critical incentives are protected from future policy reversals,” Verheijen stated via social media.She described the development as a “bold step toward sustainable growth and shared prosperity for all Nigerians.”
One of the standout provisions is the VAT exemption for CNG and LPG—an incentive seen as pivotal to Nigeria’s energy transition. By removing VAT from cleaner fuels, the government aims to accelerate the adoption of gas-powered vehicles, lower energy costs, and reduce dependence on petrol and diesel.
Analysts have welcomed the reforms as a timely intervention to drive energy diversification, improve fiscal transparency, and bolster local processing capacity in the oil and gas value chain.
The focus on deep offshore and midstream investments is also expected to unlock underutilized reserves and reduce Nigeria’s reliance on petroleum imports—advancing the country’s long-term goal of self-sufficiency in energy production.