‘Tinubu loyalists’ among Nigerians feeling impact of price rises of goods, services
By Jeph Ajobaju, Chief Copy Editor
Nigerians are lamenting the introduction of a 7.5 per cent Value-Added Tax (VAT) on the price of premium motor spirit (PMS), popularly called petrol, less than a month after President Bola Tinubu removed fuel subsidy in his inaugural speech on May 29.
The pump price of petrol now ranges from N488 to N600 across the 36 states and the Federal Capital Territory (FCT).
Former Finance Minister Zainab Ahmed announced the Finance Act 2020 raised the previous 5 per cent VAT to 7.5 per cent on certain commodities, including automobile gas oil (diesel), which was implemented on 20 February 2020.
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.
Other commodities have been VAT-compliant, but petrol was not until subsidy was yanked off. That has further increased the pump price of fuel.
Below are the views of citizens on the price increase, as chronicled by The PUNCH.
Ingawa (motorist)
“That means for every litre of AGO you will buy, you have to pay 7.5% Consumer Tax (VAT) of the pump price.
“For example; If one litre of AGO is N650 at the filling station, then you have to pay an additional N48.75 being payment for 7.5% VAT. The total price per litre will be N698.75 per litre.”
Angry Non-Nigerian
“When Tinubu said ‘widen the tax net, you people thought he was joking. The only thing that man knows is tax, tax and tax. Ask Lagosians.”
One Oyo
“The citizens will be the main IGR [internally generated revenue] for this government.
“There is no single move to cut the cost of government from the Senate to the House [of Representatives] to other departments. They went to education first by trying to add tuition fees, now 7.5% VAT on PMS. Everything directly to the common man.”
Akwa Ibom first son
“So after the removal of subsidy and the price of fuel jumped to 530, they’ve now decided 7.5% VAT on AGO. In all of these, what are the politicians losing, and what are they sacrificing?
“7.5% VAT on diesel after subsidy on petrol was removed? They will show you people shege banza pro max air 2. The government is after our lives bro!.
“Even those that were shouting ‘Akanbi’ [Tinubu loyalists] will not be left out. They might even end up being the most affected. The evil will go round. I swear!
Madu Obi
“Good governance is not attained by wishful thoughts, things don’t work that way. Now, Tinubu is going for a check-up after ruining the economy with senseless policies.
“His supporters have been crying since last week because the pressure is going around. We must all learn a lesson.”
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Related articles:
Fuel subsidy removal cuts national consumption by 26m litres per day
NBA reminds Tinubu, Nigerians suffering under fuel subsidy removal
Oil marketers can’t raise N10b each to restock depots
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Abuja reiterates collection of 7.5% VAT on diesel
Abuja has reconfirmed collection of 7.5 per cent VAT on diesel, according to The PUNCH.
Officials of the Nigeria Customs Service (NCS) and Federal Inland Revenue Service (FIRS) said diesel was not exempted from VAT based on the VAT Modification Order 2021.
NCS spokesperson Abdullahi Maiwada replied “Yes” when asked if VAT is being collected on diesel.
“If you ask me whether Customs collect 7.5 per cent VAT on AGO, I will tell you yes and I’ll give you the reasons. There’s what we call VAT Modification Order 2021, which exempts petroleum products of Harmonised System Codes,” he said.
“But the HS Codes for Petroleum products that are exempted from paying VAT are those in the region of 2709.00.00.00 – 2710.19.12.00. The HS Codes are what we use to classify commodities.
“But AGO is classified under HS Code 2710.19.21.00, which is not exempted from the payment of VAT. Now, this is based on the VAT Modification Order 2021.”
An FIRS official, Tobi Wojuola, also confirmed “the position of the VAT Modification Order 2021 is that VAT is chargeable on diesel.”
An internal NCS memo – with reference: NCS/T&T/T/899/217/VOL.I dated 8 June 2023 – makes it clear VAT must be paid on diesel.
The memo was signed by NCS Assistant Comptroller-General (Tariff and Trade), Mba Musa, on behalf of Deputy Comptroller- General (Taritf and Trade).
It read in part:
“I am directed to forward a letter from Federal Inland Revenue Service on the above subject matter. The VAT Modification order 2021 only exempts petroleum products of HS codes 2709.00.00.00 – 2710.19.12.00 from payment of VAT.
“AGO or diesel falls classifiable under HS Code 2710.19.21.00 and is not exempted from paying VAT.
“Subsequent upon the above, all future importations of the product should assess and pay VAT at the point of entry into the country.
“Also note that AGO or diesel are not exempted from destination inspection or import guidelines and as such are expected to process Form M and PAAR as well as make declarations appropriately in the NICIS II system.
“A copy of the letter from FIRS is attached for your information. Take note and be guided accordingly, please.”
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