The Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, Taiwo Oyedele, says Value Added Tax (VAT) should be suspended on Automotive Gas Oil (AGO) also known as diesel to cushion the biting economic effect of the removal of subsidy on Premium Motor Spirit (PMS) also known as petrol.
Oyedele made this known on Channels Television’s Sunrise Daily breakfast programme on Wednesday.
“What the President wants us to do is that within the first 30 days, there are those low-hanging fruits that people have generally agreed that this is a problem but nobody has done anything about it,” he said.
“Personally, for example, this is not promising that it would be done. I think that we should suspend VAT on diesel because we removed fuel subsidy on petrol and prices are going up.
“We are going to table it before the committee. These are the things we want to do in the first 30 days.”
Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), said, within the next six months, the committee will actualise critical tax reforms, rewrite and harmonise tax laws, issue executive orders, roll out regulations, amongst others.
He said the committee, which was inaugurated by President Bola Tinubu on Tuesday in Abuja, has one year for the implementation of its policies but noted that the 30 days, six months and one year periods run concurrently.
Oyedele further said that the Federal Inland Revenue Service (FIRS) is best suited to collect revenue for ministries, department and agencies.
He said the presidential committee would look into excess bank charges, adding that businesses pay as high as 65 to 70 levies and taxes but the committee’s plan is to reduce the number of taxes to about 10.
‘The Inauguration Gift’
On May 29, 2023, President Bola Tinubu gave Nigerians an inauguration gift at the Eagle Square where he was sworn in as Nigeria’s President for the next four years.
The President announced the removal of petrol subsidy, one month earlier than the scheduled date for the expiration of subsidy in the 2023 Budget.
The pump price per litre of petrol immediately rose from around N184 to about N500. The administration later floated the naira against foreign exchange and in a matter of weeks, petrol price per litre jumped from N500 to over N600.
Similarly, Nigeria’s headline inflation rose to 22.79% in June from the 22.41% recorded in May 2023 amid soaring food prices and rising cost of transportation occasioned by petrol subsidy removal.
The Organised Labour last week organised a nationwide protest to register its displeasure over the abrupt removal of petrol subsidy without first putting palliatives in place to cushion the economic effect.
Meetings between the Labour leaders and the Federal Government have not yielded much fruit in the last two months as Nigerians lament untold hardship.