Taiwo Oyedele, chairman of the presidential fiscal policy and tax reforms committee, has clarified the context around the proposed 5 percent fuel tax, stressing that any such levy should only be introduced when the naira appreciates or global crude oil prices fall.
Speaking recently during an interview on Arise TV, Oyedele said the right approach is to consider introducing the tax only when it can be implemented without negatively affecting Nigerians.
“For me, and this is speaking for myself, the appropriate time to consider a tax like that would be, number one, when you have an appreciation in the currency,” he said.
“If naira appreciates by just 5 percent, you will collect this tax and there will be no change in the pump price of petroleum products. It could also be when you have a decline in the international price of crude oil. And it could be a combination of both.”
The chairman said any revenue generated must translate to visible improvements in the quality of life for citizens.
“On the positive side, the revenue you get from this tax would have real, practical, physical impact on the people,” Oyedele said.
“If you can travel for less time, it is safer. You save even more money, not only on fuel, time, but also productivity.”
He also addressed public concerns and speculation around the fuel surcharge, saying there is no plan or proposal to introduce a new one.
The chairman said the current tax reform effort involves repealing several existing laws and consolidating Nigeria’s tax legislation into a single, simple, and easy-to-understand document.
“While we had over 15, 20 different laws, we have consolidated. It doesn’t mean that all those old laws were useless and we need to just write everything afresh,” he said.
“In the process of trying to harmonise, you will make that call as to whether a particular tax makes sense for us to sustain it, or whether it should be repealed, or whether it should be modified.”
Oyedele added that tax laws are not just created for the present but are meant to serve future generations.
The tax expert said during the legislative process — not in the original proposal submitted by the president — it was decided that if the surcharge is ever applied, it should be handled by the appropriate tax authority.
“This was in the course of legislating on the bills that this came up. Instead of FERMA to collect the tax and try to administer it, we thought it is not appropriate for an agency of government to be collecting taxes,” the chairman said.
“The first thing we did was, should this tax become necessary, let it be collected by the Nigerian Revenue Service.”
Oyedele added that the revenue from the tax should be allocated specifically to road infrastructure.
