FG Declares Zero Percent Import Duty, VAT on Machinery, Equipment for Gas Utilization

By Felix Kumuyi

FG Declares Zero Percent Import Duty, VAT on Machinery, Equipment for Gas Utilization

President Bola Ahmed Tinubu GCFR

In line with the Presidential Gas for Growth initiative of President Bola Ahmed Tinubu GCFR administration, the Nigeria Customs Service (NCS) has announced the implementation of fiscal incentives machinery, equipment, and spare parts imported for Nigerian gas utilisation.            

Contained in a press release statement signed by the National Public Relations Officer of Customs, CSC Abdullahi Maiwada, the implementation of fiscal incentives, under the Presidential Gas for Growth Initiative is in alignment with President Bola Ahmed Tinubu GCFR’s commitment to enhancing Nigeria’s investment climate and increasing domestic gas utilisation.            

According to the statement, machinery, equipment, and spare parts imported for Nigerian gas utilisation are now subject to a zero percent (0%) import duty rate, and this covers all equipment related to Compressed Natural Gas (CNG) and Liquidfied Natural Gas (LNG).  

Similarly, the statement further added that all feed gas for all processed gas, Compressed Natural Gas, imported Liquefied Petroleum Gas, CNG equipment components, conversion and installation services, LPG equipment components, conversion and installation services, and all equipment and infrastructure related to the expansion of CNG, LPG, and the Presidential CNG Initiative, including conversion kits are also now zero-rated for Value Added Tax (VAT).            

“Pursuant to Part 1, Section 5 of the Customs and Excise Tariff Act, machinery,

equipment, and spare parts imported for Nigerian gas utilisation are now subject to a zero percent (0%) import duty rate. This exemption encompasses all equipment related to Compressed Natural Gas (CNG) and Liquefied Petroleum Gas (LPG) imported into Nigeria.

“In addition, the following items are now zero-rated for Value Added Tax (VAT): feed gas for all processed gas, Compressed Natural Gas, imported Liquefied Petroleum Gas, CNG equipment components, conversion and installation services,

LPG equipment components, conversion and installation services, and all equipment and infrastructure related to the expansion of CNG, LPG, and the Presidential CNG Initiative, including conversion kits,” the statement said.

The service however advised importers seeking to benefit from these incentives to compulsorily obtain an Import Duty Exemption Certificate (IDEC) from the Federal Ministry of Finance and a letter of support from the Office of the Special Adviser to the President on Energy.

It added further that, the importation of LPG under HS Codes 2711.12.00.00,

2711.13.00.00 and 2711.19.00.00 are exempted from both Import Duty and VAT, and consequently, all Debit Notes (DN) issued to petroleum marketers who have imported LPG using these codes from August 26, 2019, to date will be withdrawn by the NCS in line with previous approvals.

These measures, the statement says are designed to ameliorate the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.           

Also, the statement assured that the NCS, under the leadership of the Comptroller General of Customs, Bashir Adewale Adeniyi MFR is committed to the effective implementation of these incentives, as it urged all stakeholders to ensure strict and prompt compliance.