In a bid to ameliorate the economic burdens on businesses and households, Nigeria’s Federal Government has announced a waiver on Value Added Tax (VAT) on Electric Vehicles, Compressed Natural Gas (CNG), Liquified Natural Gas (LNG) and Clean Cooking Equipment. This was contained in the Official Gazette of Value Added Tax (VAT) Modification Order 2024.
According to the Minister in Charge of the Ministry of Finance Mr. Wale Edun, “these measures are designed to lower the cost of living, bolster energy security, and accelerate Nigeria’s transition to cleaner energy sources.”
This policy direction might be the country’s debut effort towards enticing the buying public to consider electric vehicles. This tax waiver shall encompass electric vehicles, EV battery, charging systems, EV assembly units and EV solar charging system. With the removal of 7.5%, electric vehicle manufacturers like Saglev and Innoson could see a bump in sales in the coming months as this policy gets implemented and takes effect. You can read more on this new law here.
For individual car importers and dealerships, this policy is a good signal to lean towards electric vehicles. However, while this is a commendable and laudable effort, it is a standalone effort towards a fast-tracked transition to renewable means of mobility. Removal of VAT is just one of many incentives expected to encourage the production, importation as the case may be, purchase and hopefully, export these cars. There needs to be a convergence of policies, laws, incentives, nudges and enlightenment to make this a reality. In this our article, we explained how Nigeria can prepare for an electric future.
Kenya has exhibited this with its draft policy targeting electric vehicles. South Africa is not left out in the race to electric vehicle adoption. Morocco should be understudied as it currently leads others as Africa’s car exporter.
