FG Waives Value-Added Tax On CNG, Other Energy Sources Amid N2 Billion Loss To Poor Power Supply

• The federal government is keen on attracting investors into the clean and renewable energy sector
• In the latest move, the government has provided legislative incentive for investors to inject more funds
• This is to mitigate the N2 billion losses suffered annually across the country due to energy supply issues

Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.

President Bola Tinubu has made no secret of his desire to drive a transition from fossil fuel to clean energy in Nigeria.

To further this initiative, the National Assembly has approved clauses waiving Value Added Tax (VAT) on Compressed Natural Gas (CNG) and renewable energy sources in the new tax reform bill.

The Speaker of the House of Representatives, Tajudeen Abbas, disclosed this at the ‘First National Legislative Conference and Expo on Renewable Energy’ held in Lagos on Monday.

Abbas explained that waiving VAT for products in this sector will attract private investors into the clean and renewable energy space and grow adoption in Nigeria.

He added that the legislators are also looking to provide legal backing for the federal government’s Renewable Energy and Energy Efficiency Policy adopted in 2015.

Abbas observed that, as a matter of importance of public health and environmental safety, Nigeria needs to provide access to clean cooking fuels, and this would be achieved through collaborations.

Overall, these initiatives would improve access to energy amid the crisis plaguing the electricity sector.

Nigeria loses N2 billion to poor power supply

The United Nations Development Programme (UNDP) has established that Nigeria currently loses over N2 billion annually due to inadequate and unstable power supply.

While speaking at the conference, the UNDP Resident Representative, Elsie Attafuah, pointed out the huge economic losses Nigeria suffered due to poor electricity.

Attafuah noted that a lot of agricultural produce like fruits, vegetables, and yams end up wasted due to poor power supply in Nigeria, the PUNCH reports.

She noted that the state of unemployment in the country is further worsened by the power supply problems, adding that many youths could have found income-generating endeavours if the power supply was stable.

Attafuah disclosed that the UNDP’s initiative to generate power for farmers in the north was yielding positive results, with increased profitability for the farmers.

Renewable energy is no longer optional

Speaking further at the conference organized by the House of Representatives Committee on Renewable Energy in collaboration with the UNDP, Honorable Abbas stated that Nigeria has no choice but to transition to renewable energy sources.

He explained that this would help achieve energy security and drive economic development, while also ensuring a sustainable environment for the future.

Abbas referenced global trends, where $1.7 trillion out of $2.8 trillion in global energy spending in 2023 was targeted towards clean energy and related technologies.

He explained that as the global market turns to cleaner alternatives, Nigeria must diversify its economy and attract renewable energy investments to stay relevant and financially stable.

FG lists properties exempted from tax

In related news, the federal government declared that the stamp duty tax will not be enforceable on all properties.

Tax committee chairman, Taiwo Oyedele, explained that properties with rents below N10 million will not be required to pay stamp duties.

Legit.ng also reported that residential properties are excluded from property gains tax when they are sold.

Source: Legit.ng