FG Approves 100% VAT Waiver on CNG, LPG
Orders withdrawal of debit notes issued since August 26, 2019
Ndubuisi Francis in Abuja
The federal government has approved a zero per cent Value Added Tax (VAT) waiver on feed gas for all processed, Compressed Natural Gas (CNG) and imported liquified petroleum gas, with immediate effect.
The VAT-free waiver also extends to CNG equipment components, conversion and installation services, Liquified Petroleum Gas (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.
In a circular seen yesterday, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, directed the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS) to immediately apply a zero per cent VAT rate on the items.
The circular titled, ‘Fiscal Incentives for the Presidential Gas for Growth Initiative’ read: “In line with His Excellency, Mr. President’s commitment to improve the investment climate in Nigeria, and to increase the utilisation and supply of gas in the domestic market:
“Pursuant to Part 1, Section 5 of the Customs and Excise Tariff Act, which grants an Import Duty Waiver on machinery, equipment and spare parts imported into Nigeria for the utilisation of Nigerian gas, the importation of all equipment related to CNG and LPG into the Nigerian market shall attract zero percent import duty rate.
“”Consequently, the FIRS and the NCS are hereby directed to apply a zero percent VAT rate on the following items: Feed Gas for all processed gas; CNG; Imported LPG; CNG equipment components, conversion and installation services; LPG equipment components, conversion and installation services.
“All equipment and infrastructure related to the expansion of CNG, LPG and the Presidential CNG Initiative, including conversion kits.”
The minister further directed that all applications for Import and Customs Duty exemption in relation to CNG equipment shall require a letter of support from the Office of the Special Adviser to the President on Energy.
He also directed that the importation of LPG under HS Codes 2711.12.OO.OO, 2711.13.OO.OO and 2711.19.OO.OO are exempted from Import Duty and Value-Added Tax.
“As a result, all Debit Notes issued to Petroleum Marketers who have imported LPG using codes 2711.1.2.00.00 and 2711.13.00.00 from August 26, 2019, to the present date should be withdrawn by the NCS in line with the previous approval,” the circular stated.
