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.
๐ท๐๐๐๐๐ ๐๐๐๐๐๐ ๐ญ๐๐๐๐๐ ๐ท๐๐๐๐๐ & ๐ป๐๐ ๐น๐๐๐๐๐๐ ๐ช๐๐๐๐๐๐๐๐ made the clarification in a post on X by a media aide to the President, Sunday Dare.
๐๐ก๐ 5% ๐๐ฎ๐ซ๐๐ก๐๐ซ๐ ๐ ๐จ๐ง ๐ ๐ฎ๐๐ฅ in the new tax laws, according to the committee is not a new tax introduced by the current administration.
โThe 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.โ
The committee stressed that the tax was not introduced by President Bola Tinubu’s new tax regime. โThe 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.โ
On the commencement date, the committee explained that โThe 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.โ
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 Nigeriaโs energy transition agenda.โ
On the essence of the tax, the committee said โis 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.โ
It added: โ While subsidy savings will provide some funding, they are insufficient to meet Nigeriaโs 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.โ
The committee also argued that the surcharge is not at odd with governmentโs
๐ซ๐๐๐จ๐ซ๐ฆ ๐จ๐๐ฃ๐๐๐ญ๐ข๐ฏ๐ ๐จ๐ ๐ซ๐๐๐ฎ๐๐ข๐ง๐ ๐ญ๐๐ฑ๐๐ฌ ๐๐ง๐ ๐๐๐ฌ๐ข๐ง๐ ๐ญ๐ก๐ ๐๐ฎ๐ซ๐๐๐ง ๐จ๐ง ๐๐ข๐ญ๐ข๐ณ๐๐ง๐ฌ
โThe 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,โ it stated.
The committee ealso revealed that it removed surcharge from ๐ญ๐ก๐ ๐ ๐๐๐๐ ๐๐๐ญ and incorporated it in the new tax laws โwhich 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.โ
