As an incentive for their adoption, the Nigeria Customs Service has announced the elimination of import taxes on imported cooking gas, also known as liquefied petroleum gas, and all imported compressor natural gas-related equipment and spare parts.
Chief Superintendent Abdullah Maiwada, the NCS’s National Public Relations Officer, made this announcement in a statement on Wednesday.
The products and materials include CNG conversion kits and LPG-related equipment and spare components.
According to Maiwada, the incentives were authorised to lower living expenses and accelerate Nigeria’s switch to clean energy.
He went on to say that the incentives aligned with the Presidential Gas for Growth Initiative of President Bola Tinubu.
The statement reads: “The Nigeria Customs Service (NCS) announces the implementation of fiscal incentives under the Presidential Gas for Growth Initiative in line with President Bola Ahmed Tinubu GCFR’s commitment to improving Nigeria’s investment climate and increasing domestic gas utilisation.”
“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.
“Furthermore, 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.”
He clarified that in order for importers to take advantage of these benefits, they need to have a letter of support from the Office of the Special Adviser to the President on Energy and an Import Duty Exemption Certificate (IDEC) from the Federal Ministry of Finance.
“Therefore, in accordance with prior approvals, the NCS will withdraw all Debit Notes issued to petroleum marketers who have imported LPG using these codes from August 26, 2019, to date,” the statement continued.
The NCS asked all parties involved to guarantee rigorous and timely compliance, reaffirming its commitment to the successful implementation of these incentives.
What To Note
For cooking gas imported under the following Harmonised Commodity Descriptions, the NCS has eliminated import taxes and value-added tax (VAT): 2711.12.00.00, 2711.13.00.00, and 2711.19.00.00.
- All CNG and LPG-related equipment is free from import taxes.
- These rewards are with President Tinubu’s plan to encourage more Nigerians to utilise CNG.
- Less than 100,000 vehicles have been converted to CNG thus far, despite the Presidential CNG initiative’s goal of over a million vehicles by 2027.