The Presidency has clarified the 5% surcharge on Petroleum products, saying while it is true the tax exists, it will however not be implemented immediately.
𝑷𝒓𝒆𝒔𝒊𝒅𝒆𝒏𝒕𝒊𝒂𝒍 𝑭𝒊𝒔𝒄𝒂𝒍 𝑷𝒐𝒍𝒊𝒄𝒚 & 𝑻𝒂𝒙 𝑹𝒆𝒇𝒐𝒓𝒎𝒔 𝑪𝒐𝒎𝒎𝒊𝒕𝒕𝒆𝒆 made the clarification in a post on X by a media aide to the President, Sunday Dare.
𝐓𝐡𝐞 5% 𝐒𝐮𝐫𝐜𝐡𝐚𝐫𝐠𝐞 𝐨𝐧 𝐅𝐮𝐞𝐥 in the new tax laws, according to the committee is not a new tax introduced by the current administration.
“The provision already exists under the Federal Roads Maintenance Agency (Amendment) Act, 2007. Its restatement in the new Tax Act is for harmonisation and transparency rather than immediate implementation.”
The committee stressed that the tax was not introduced by President Bola Tinubu’s new tax regime. “The surcharge is not new. It already exists under the Federal Roads Maintenance Agency (Amendment) Act, 2007 (FERMA Act). The new Tax Act only restates it for harmonisation and transparency. Hence, it was not part of the original tax reform bills submitted by the president to the National Assembly.”
On the commencement date, the committee explained that “The surcharge does not take effect automatically with the new tax laws. It will only commence when the Minister of Finance issues an order published in the Official Gazette as stated under Chapter 7 of the Nigeria Tax Act, 2025. This safeguard ensures careful consideration of timing and economic conditions before implementation.”
The co..ittee also explained the scope of the surcharge, which it stated will not affect several energy products used by households. This includes household kerosene, cooking gas (LPG), and compressed natural gas (CNG). Clean & renewable energy products are also excluded to align with Nigeria’s energy transition agenda.”
On the essence of the tax, the committee said “is designed as a dedicated fund for road infrastructure & maintenance. If implemented effectively, it will provide safer travel conditions, reduce travel time. This practice is virtually universal with over 150 countries imposing various charges ranging between 20% to 80% of fuel products to guarantee regular investment in road infrastructure.”
It added: “ While subsidy savings will provide some funding, they are insufficient to meet Nigeria’s huge and recurring road infrastructure needs among other public finance needs. A dedicated fund ensures reliable and predictable financing for roads, complementing the budget and ensuring roads are not left underfunded.”
The committee also argued that the surcharge is not at odd with government’s
𝐫𝐞𝐟𝐨𝐫𝐦 𝐨𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞 𝐨𝐟 𝐫𝐞𝐝𝐮𝐜𝐢𝐧𝐠 𝐭𝐚𝐱𝐞𝐬 𝐚𝐧𝐝 𝐞𝐚𝐬𝐢𝐧𝐠 𝐭𝐡𝐞 𝐛𝐮𝐫𝐝𝐞𝐧 𝐨𝐧 𝐜𝐢𝐭𝐢𝐳𝐞𝐧𝐬
“The reforms have already reduced multiple taxes and removed or suspended several charges that directly affect households and small businesses, such as VAT on fuel, excise tax on telecoms, and D cybersecurity levy. By harmonising earmarked taxes, the government is reducing duplication and ensuring a more efficient tax system,” it stated.
The committee ealso revealed that it removed surcharge from 𝐭𝐡𝐞 𝐅𝐄𝐑𝐌𝐀 𝐀𝐜𝐭 and incorporated it in the new tax laws “which are designed to provide a forward-looking legal framework for Nigeria. Keeping this provision in place within a harmonised legal framework ensures Nigeria is prepared to address critical challenges. It is not about immediate implementation, but to ensure D law provides a clear and effective framework for when it becomes necessary in the future.”
