The Presidential Fiscal Coverage and Tax Reforms Committee has clarified that the proposed 5% gas surcharge beneath Nigeria’s new tax legal guidelines won’t apply to a number of family vitality merchandise.
In an announcement of Often Requested Questions (FAQs) launched on Saturday by way of X (previously Twitter), committee chairman Taiwo Oyedele defined that family kerosene, cooking fuel (LPG), compressed pure fuel (CNG), and clear or renewable vitality merchandise are exempt from the levy.
The clarification adopted rising considerations that the surcharge may worsen the cost-of-living disaster for Nigerians.
“No. A number of vitality merchandise utilized by households are exempt. This contains family kerosene, cooking fuel (LPG), and compressed pure fuel (CNG). Clear and renewable vitality merchandise are additionally excluded to align with Nigeria’s vitality transition agenda,” the committee stated.
The gas surcharge has no rapid implementation
The committee emphasised that the surcharge won’t robotically take impact when the brand new tax legal guidelines start in January 2026.
“It would solely start when the Minister of Finance points an order revealed within the Official Gazette as said beneath Chapter 7 of the Nigeria Tax Act, 2025. This safeguard ensures cautious consideration of timing and financial situations earlier than implementation,” the committee stated.
The committee defined that though financial savings from petrol subsidy elimination can assist highway initiatives, the funds are usually not sufficient to cowl Nigeria’s big and recurring infrastructure wants alongside different fiscal obligations.
The fiscal committee added that the reform doesn’t contradict the administration’s promise of decreasing taxes, noting that a number of fees, comparable to VAT on gas, excise tax on telecoms, and the cybersecurity levy, have already been eliminated or suspended.
On its abolition, the tax reforms committee stated the surcharge can’t be abolished as a result of it was designed as a devoted fund for highway infrastructure and upkeep.
“If carried out successfully, it should present safer journey situations, cut back journey time and price, decrease logistics prices and automobile upkeep bills, which can profit the broader financial system,” the committee stated.
“This follow is just about common with over 150 international locations imposing numerous fees ranging between 20% to 80% of gas merchandise to ensure common funding in highway infrastructure,” the committee added.
What it’s best to know
President Bola Tinubu signed into legislation 4 tax reform payments on key areas of Nigeria’s fiscal and income framework in June.
- The 4 payments are the Nigeria Tax Invoice, the Nigeria Tax Administration Invoice, the Nigeria Income Service (Institution) Invoice, and the Joint Income Board (Institution) Invoice.
- They have been handed by the Nationwide Meeting after months of consultations with numerous curiosity teams and stakeholders.
- The Government Chairman of the Federal Inland Income Service (FIRS), which can now be generally known as the Nationwide Income Service (NRS), Zacch Adedeji, introduced that the newly signed 4 tax reform payments will take impact on January 1, 2026.
The tax payments generated important public debate and skepticism throughout numerous teams and areas within the nation. In response, intensive consultations have been held to include numerous opinions into the legislative course of.
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