Business
No Plan To Implement 5% Fuel Tax Immediately — Edun
The Federal Government says it has no immediate plan to implement the 5 percent Petroleum Products Tax as contained in the Tax Administration Act, 2025.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, disclosed this, midweek, at a press briefing in Abuja.
Recall that the tax has generated wide-spread anger among Nigerians, with organised labour giving the government an ultimate to step it down or face an industrial action.
Speaking on it, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, explained that the proposed fuel surcharge is intended to generate a dedicated fund for Nigeria’s deteriorating roads, not to add extra strain on households.
Speaking on Channels Television’s Morning Brief on Tuesday, he acknowledged public worries that recent tax reforms could worsen inflation but argued that improved road infrastructure is essential to lowering the cost of moving goods and people.
He also dispelled the notion that the surcharge is unnecessary after the subsidy was removed, stating that the tax was “introduced in 2007, and it wasn’t implemented because government was subsidising fuel.”
However, Edun described the surcharge as a long-standing provision introduced under the Federal Road Maintenance Agency (FERMA) Act 2007 and not a new tax measure created by the Tinubu administration.
According to him, “It is important to make this distinction. The inclusion of the surcharge in the 2025 Nigeria Tax Administration Act does not mean an automatic introduction of new tax. It doesn’t mean fresh taxation automatically.
“There is a whole formal process involved, and as of today, no order has been issued, none is being prepared and there is no plan. There is no immediate plan to implement any surcharge.
“This government is fully aware of the economic pressures of the time and will not take decisions that will make things even more burdensome.
“Our priority is to strengthen tax governance, block revenue leakages, and improve efficiency rather than just levy new taxes, charges, and costs.”
The fuel tax was designed to finance road maintenance and meant to be shared between the federal government and states on a 40%/60% basis.
Edun allayed fears that the new tax laws, which implementation has been scheduled to commence on January 1, 2026, would increase the suffering of Nigerians.
The reaction to the tax is clearly based on the benefit of hindsight that increases in petroleum products prices usually trigger heightened inflation in the country which was the basis of the widespread criticism of the tax.