Content Board, FIRS offer tax incentives for oil industry investments

Oil and gas companies desirous to reduce their tax burden and grow profitability should consider increasing investments in research and development (R&D) to take advantage of the incentives provided in existing fiscal laws, the Nigerian Content Development and Monitoring Board (NCDMB) and the Federal Inland Revenue Service (FIRS) have said.

The Executive Secretary of NCDMB, Engr. Simbi Kesiye Wabote and the Executive Chairman, Federal Inland Revenue Service (FIRS), Mr Muhammad Nami, stated at the one-day Nigerian Oil and Gas Industry Suppliers’ Tax Awareness Workshop, jointly organized by the two organizations at the NCDMB Conference Hall in Yenagoa, Bayelsa State.

Wabote disclosed that the Finance Act 2021 and other extant tax codes relating to Research and Development provide attractive tax incentives for oil and gas firms that invest in R&D.

The executive secretary identified funding as one of the key pillars of R&D, which informed the launch of the $50 million Nigerian Content Research & Development Fund.

The Executive Chairman, FIRS Mr Nami, who was represented by his Senior Special Assistant, Mr Gabriel Ogunjemilusi said: “there is an allowable deduction of up to 10% of the amount of reserve made out of the profits of a period by a company for research and development as well as companies and other organizations that invest in R&D facilities for commercialization can claim a tax credit of up to 20% of the cost of their qualifying expenditures.”