Library / Implementation Guidelines for the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024.
Implementation Guidelines for the Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024.
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4.1 Eligible Midstream Gas Operations
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1) Transportation of natural gas to gas‘conditioning, and’pricessing plants;
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2) Transportation of natural gas from: gas condifioning, and..processing- plants. to gas-based
industries, and other end-use customers, specifically. not exceeding éxit points connecting»
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gas distribution pipelines and networks;
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3) Gas processing and conditioning plants;
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Gas Bulk storage infrastructures deliberately installed not for sale but holding’$tock of plant
condensates, liquefied petroleum gas (LPG) or liquefied'na{ural gas (LNG)>*
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4.2 Basis for Eligibility
Companies engaged in the operations listed above will be required to possess the relevant
licences as may be issued by NMDPRA.
4.3 Implication of Section 39 of CITA on GUIA
A company shall only be granted the gas utilization investment allowance upon the expiration
of the tax-free period granted under section 39(1) of the Companies Income Tax Act, provided
that
a company that has enjoyed the 25% GUIA will not be entitled to any other investment
allowance under-Seetion 39 of CITA.
4.4 Qualifying Plaiitand Equipment
For the purpose of this guideline, the qualifying plant and equipment refers to tangible asset
and other componénts that make up a plant orequipment used for gas processing and
transportation in midstream.gas operations of which its useful life is beyond a period of one
year.
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To qualify for GUIA, the following conditions are required:
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The cost of the qilalifying plant and equipment must have been incurred by the
company;
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The cost must have been incurred from the commencement date of this incentive order,
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Proof of ownership of qualifying plant and equipment; and
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Evidence of direct use of plant and equipment for gas processing and transportation in
midstream gas operations.
5.0
Submission of Information by Eligible Company
All eligible companies upon filing their returns, shall provide
a certified copy of relevant
information submitted to NUDPRA on all new and ongoing projects.
Thereafter, FIRS shall process claims for allowances on qualifying plants and equipment and
grant GUIA to eligible applicants.
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6.0 Rate of Gas Utilization Investment Allowance.
The gas utilization investment allowance to be granted. to-éligijlé companies shall
be 25% of
the actual expenditure incurred on plant and equipment.
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RegulationsPDF20242024-045