Nigeria Tax Act, 2025
The Nigeria Tax Act, 2025, taking effect from 1 January 2026 streamlines the taxation regime in Nigeria.
In relation to petroleum operations, it levies a hydrocarbon tax on the profits of any company engaged in upstream petroleum operations. It permits the deduction of certain expenses in the computation of profit, including the costs of gas reinjection wells that re-inject natural gas that otherwise would be flared. However, any penalty, natural gas flare fees or imposition relating to natural gas flaring may not be deducted.
The Act also lists the following fiscal incentives for the utilisation of associated gas:
- the investment required to separate crude oil and gas from the reservoir into usable products shall be considered as part of the oil field development;
- capital investment on facilities or equipment to deliver associated gas in usable form at utilisation or designated custody transfer points shall be treated as part of the capital investment for oil development
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