December 4, 2023

FG implements 7.5% VAT on diesel, Nigerians kick.

The Federal Government, on Monday, confirmed that it had commenced the implementation of the payment of 7.5 per cent Value Added Tax on Automotive Gas Oil, popularly called diesel.
Officials of the Nigeria Customs Service and Federal Inland Revenue Service confirmed this in Abuja, stressing that AGO was not exempted from the payment of VAT based on the VAT Modification Order 2021.
The development was, however, condemned by Nigerians, who pointed out that citizens were still trying to adjust to the hike in the pump price of Premium Motor Spirit, popularly called petrol, not knowing that plans had been perfected to further raise payments for diesel.
When asked by our correspondent if the NCS was now collecting 7.5 per cent VAT on the imports of AGO, the spokesperson for the service, Abdullahi Maiwada, replied, “Yes.”
An official of the FIRS, Tobi Wojuola, also confirmed the development, stressing that it was the position of the VAT Modification Order.
Nigerians lamented the effects of the introduction of the 7.5 per cent Value-Added Tax on the price of diesel.
This comes barely a month after President Bola Tinubu removed the subsidy on petrol during his inaugural speech on May 29, raising the price of PMS from N188 to about N580 in different states of the federation.
Recall that the Minister of Finance, Budget and National Planning, Zainab Ahmed, announced that the Finance Act 2020 raised the previous five per cent VAT of the country to 7.5 per cent on commodities including automobile gas oil and it was implemented on February 20, 2020.
But the VAT-exempt items include honey, bread, cereals, cooking oils, culinary herbs, fish, flour, starch, fruits, meat, poultry, milk, nuts, pulses, roots, salt, vegetables, water, sanitary pads, tampons, tertiary, secondary, primary and nursery tuition.
While other commodities have been VAT-compliant, diesel was not until recently.
However, the new development has hit Nigerians hard, as many have called for an utmost review of it, especially because of the recent removal of fuel subsidies.

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