Nigeria plans to extend
tax waivers to investors who build mid-stream projects such as
refineries, oil pipelines and terminals/jetties.
The proposal is contained in a draft National Petroleum Fiscal Policy produced by the petroleum ministry with domestic and international industry input. The policy addresses fiscal issues and sets out appropriate fiscal policy goals and rules for the oil and gas sector.
Under the new policy obtained from the ministry in Abuja, refineries infrastructure, oil pipelines and storage systems will now benefit from similar terms obtainable under Section 39 of the Company Income Tax Act (CITA).
Section 39 of the CITA stipulates, among others, that a company engaged in gas utilization (downstream operations) shall be granted, “(a)an initial tax‐free period of three years which may, subject to the satisfactory performance of the business, be renewed for an additional period of two years,”
The government in the policy document said Section 39 of CITA will be amended to include mid-stream oil utilisation in addition to gas utilization projects.
There is also a plan to amend Section 39 of the CITA to include all liquefied petroleum gas (cooking gas) infrastructures, including cylinder manufacturing activities, terminals/jetties, pipelines, storage and distribution systems so that they will now enjoy section 39 of CITA benefits.
In the upstream, the new fiscal arrangements seek to reduce the government’s take for the onshore and shallow water fields, where it said, the burden is too high and is impeding development of smaller new fields, in particular for small companies.
“It will also aim to increase the government’s take in deep water, make petroleum revenues easier to collect and make the collection process more transparent,” the document said.
The overall objectives of the proposed fiscal rules, according to the government, are that all companies engaged in upstream petroleum operations should pay Company Income Tax, including the NNPC and successors, among other numerous proposals.
The proposal is contained in a draft National Petroleum Fiscal Policy produced by the petroleum ministry with domestic and international industry input. The policy addresses fiscal issues and sets out appropriate fiscal policy goals and rules for the oil and gas sector.
Under the new policy obtained from the ministry in Abuja, refineries infrastructure, oil pipelines and storage systems will now benefit from similar terms obtainable under Section 39 of the Company Income Tax Act (CITA).
Section 39 of the CITA stipulates, among others, that a company engaged in gas utilization (downstream operations) shall be granted, “(a)an initial tax‐free period of three years which may, subject to the satisfactory performance of the business, be renewed for an additional period of two years,”
The government in the policy document said Section 39 of CITA will be amended to include mid-stream oil utilisation in addition to gas utilization projects.
There is also a plan to amend Section 39 of the CITA to include all liquefied petroleum gas (cooking gas) infrastructures, including cylinder manufacturing activities, terminals/jetties, pipelines, storage and distribution systems so that they will now enjoy section 39 of CITA benefits.
In the upstream, the new fiscal arrangements seek to reduce the government’s take for the onshore and shallow water fields, where it said, the burden is too high and is impeding development of smaller new fields, in particular for small companies.
“It will also aim to increase the government’s take in deep water, make petroleum revenues easier to collect and make the collection process more transparent,” the document said.
The overall objectives of the proposed fiscal rules, according to the government, are that all companies engaged in upstream petroleum operations should pay Company Income Tax, including the NNPC and successors, among other numerous proposals.
Daily Trust
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