The Federal Government will not implement the proposed 5 per cent fuel surcharge until the naira appreciates significantly or global crude oil prices fall, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr Taiwo Oyedele, has said.
Speaking at the Haulage and Logistics Magazine Conference and Exhibition in Lagos on Thursday, Oyedele explained that whilst the surcharge represents sound policy aimed at funding road maintenance, introducing it under current economic conditions would place additional burden on Nigerians already grappling with high living costs.
The tax reform chief disclosed that the surcharge, first introduced during the administration of former President Olusegun Obasanjo, was designed to channel a portion of fuel revenues towards road repairs, with 40 per cent allocated to federal roads and 60 per cent to state and local government roads.
“The idea is brilliant and already being implemented in more than 150 countries,” Oyedele said, noting that most of Nigeria’s 200,000 kilometres of roads remain in poor condition.
He revealed that the committee rejected a request by the Federal Roads Maintenance Agency (FERMA) to begin collecting the levy immediately after fuel subsidy removal.
“We said no introducing such a tax now would be insensitive,” he stated.
According to Oyedele, the committee included the surcharge in the draft tax law but incorporated safeguards requiring the Minister of Finance to issue an official order before implementation.
“For me, the right time will be when the naira strengthens or crude prices drop, so the surcharge won’t raise pump prices,” he added.
The committee chairman also assured stakeholders in the haulage and logistics sector that ongoing tax reforms would deliver substantial relief by eliminating multiple taxation, reducing operational costs, and improving efficiency.
“We are not introducing new taxes; we are removing the many duplicated ones that frustrate transporters and increase prices,” Oyedele said.
Under the new policy framework, he explained, small transport and logistics businesses with annual turnover below N100 million would be exempt from company income tax, whilst eligible operators would benefit from VAT refunds and tax incentives.
Oyedele further stated that the reforms would simplify Nigeria’s complex tax system and ensure transparent collection and efficient sharing of revenue across all levels of government.
