June 3, 2025

In a strategic move aimed at revitalizing Nigeria’s oil and gas industry, President Bola Tinubu has signed the Upstream Petroleum Operations Cost Efficiency Incentives Order, 2025, into law. Announced on June 2, 2025, this executive order introduces groundbreaking tax relief measures for upstream oil and gas companies that adopt cost-saving practices. What’s in the New Tax Incentive? The policy allows qualified companies in the upstream petroleum sector to retain up to 50% of the additional government revenue their cost-efficiency efforts generate. However, to benefit, these companies must meet strict performance standards set by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC). To ensure public revenues are protected, the value of the tax credit is capped at 20% of a company’s annual tax liability. This creates a balanced structure—rewarding efficient companies while safeguarding government income. Why This Matters for Nigeria’s Economy Nigeria’s economy is deeply tied to its oil and gas sector, which remains a key source of revenue and foreign exchange. By incentivizing operational efficiency, this order aims to: A Sign of Broader Tax Reform? This move comes amid widespread calls to reform Nigeria’s tax system, which critics argue places a heavy burden on small businesses and low-income earners. Social media conversations—especially on platforms like X—have been filled with frustration over high taxes on struggling companies. President Tinubu’s latest action suggests a willingness to rethink the country’s tax approach, at least starting with the oil and gas sector. It also hints at broader reforms on the horizon, especially as new tax legislation is currently under review in the National Assembly. What Comes Next? The success of this initiative will depend on the NUPRC’s enforcement of cost-efficiency standards and how effectively companies adapt to these new incentives. Industry experts are hopeful, with some predicting that this model could inspire similar reforms across other sectors of the economy. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

The Executive Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adelabu Adedeji, officially welcomed the agency’s newly recruited staff during an induction programme held on Monday, June 2, 2025. Delivering his keynote address, Adedeji highlighted the critical responsibility the new employees carry in helping shape Nigeria’s economic future and ensuring long-term fiscal sustainability. “Today marks more than just your first day on the job — it’s the start of a transformative journey. Your skills and dedication will be instrumental in redefining Nigeria’s financial framework,” he said. In a press statement issued by Arabinrin Aderonke Atoyebi, Technical Assistant to the Executive Chairman, the FIRS reaffirmed its commitment to overhauling tax administration through a strategic focus on People, Processes, and Technology. This three-pillar strategy, the statement explained, is the foundation for driving institutional relevance, improving operational efficiency, and delivering measurable national impact. “Our people are our most valuable resource. The effectiveness and sustainability of our systems depend on your expertise, creativity, and integrity,” Adedeji stated. He also stressed the agency’s focus on continuous learning and capacity building, noting that empowered and well-trained staff are essential for building public confidence and enhancing revenue collection. As part of ongoing reforms, the FIRS is also streamlining internal processes to improve transparency and accountability, while investing in advanced technologies such as artificial intelligence and data analytics to drive smarter, faster service delivery. “Technology cannot replace competence — it enhances it. It’s a tool that helps us achieve precision and efficiency,” he added. Referencing a Yoruba proverb, the Chairman reminded the new employees that systems alone are not enough — success ultimately depends on the people behind them. “Without your commitment, creativity, and sense of ownership, even the best tools will remain idle,” he remarked. He closed with a call to action, urging the inductees to uphold the highest standards of professionalism and ethics.