Nigeria: Tax and regulatory challenges in electricity supply industry

With the introduction of private companies into the electricity supply industry, tax has become a larger issue.

Introduction of private companies into the electricity supply industry

Private companies did not begin to participate in the Nigerian electricity supply industry until about 15 years ago. Prior to then, it was completely under the control of the government and so tax was not necessarily a big issue.

However, with the introduction of private companies into the electricity supply industry, tax has become a larger issue. New entrants and tax administrators are still trying to understand the peculiarities of the electricity supply industry and the peculiar tax challenges associated with it.

Read a November 2021 report [PDF 3.49 MB] prepared by the KPMG member firm in Nigeria that summarizes some of the recent issues, including:

  • Effect of Value Added Tax (VAT) (Modification) Order, 2021 on operations of the Nigerian electricity supply industry
  • Treatment of interest of unpaid Nigerian Bulk Electricity Trading (NBET) bills by generating companies and distribution companies
  • Minimum tax for companies operating in the power sector

 

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