The federal government has granted an exemption on customs duty and value-added tax (VAT) for imported Liquefied Petroleum Gas (LPG) and its associated equipment. This decision, communicated in a letter from the Ministry of Finance dated November 28, 2023, and signed by the Minister of Finance, Mr. Wale Edun, is anticipated to lead to a reduction in the cost of cooking gas within the country…..CONTINUE READING....KINDLY READ THE FULL STORY HERE▶

The letter, addressed to the Special Adviser to the President on Energy, the Comptroller-General of the Nigeria Customs Service (NCS), and the Chairman of the Federal Inland Revenue Service (FIRS), emphasized the alignment of this exemption with President Bola Tinubu’s commitment to improve Nigeria’s investment climate and advocate for environmentally friendly cooking practices.

Quoting the minister’s letter, “In line with His Excellency, President Bola Tinubu’s commitment to improving the investment climate in Nigeria, increasing the supply of LPG to meet local demand, reducing market prices, and promoting clean cooking practices, I hereby affirm Presidential directive dated July 29, 2022, with reference number PRES/88/MPR/99.”

Consequently, the importation of LPG utilizing specified HS Codes will now incur a 0% duty rate and 0% VAT rate, effective immediately. The Ministry of Finance has instructed the NCS and FIRS to adhere to this directive, pending official gazetting.

Furthermore, the ministry directed the NCS to comply with the presidential directive from July 29, 2022, and withdraw all debit notes issued to petroleum marketers who imported LPG using specific codes from August 26, 2019, to the present date. Additionally, various items such as LPG cylinders, LPG cascades, gas leak detectors, steel pipes, steel valves and fittings, LPG dispensers, gas generators, and LPG trucks, among others, are also exempted from VAT and duty payments.

The decision to exempt LPG imports from customs duty and VAT comes after consultations with stakeholders, revealing that the absence of a clear fiscal directive hindered investments in the LPG sector. The Special Adviser to the President on Energy, Olu Verheijen, highlighted in a separate letter dated November 30, 2023, that the lack of investment resulted in increased cooking gas prices and a reliance on unhealthy fuels like kerosene. Notably, the federal government had initially removed VAT on LPG in Nigeria in 2019 but reintroduced the tax in 2021, implementing a 7.5% tax on imported LPG, exempting locally manufactured gas.