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VAT on diesel suspension by President Bola Ahmed Tinubu of Nigeria as one of the packages to commemorate the Nation’s independence day of October 1st is already generating diverse reactions from the public and stakeholders alike.
Recall that the presidency of Nigeria after numerous close-door meetings with the leadership of the Nigerian Labour Congress (NLC) and Trade Union Congress (TUC) had concluded amongst other palliatives to suspend the collection of Value Added Tax (VAT) on Diesel.
Also recall that the discussion with the NLC, TUC and the federal government of Nigeria became necessary after the Federal Government in May announced the final removal of petroleum subsidy which saw the hike in pump prices with ripple effects on the economy.
Explaining further the essentials of suspending VAT on diesel for 6 months, Femi Gbajabiamila, the Chief of Staff to the president expressed that the decision is part of the Federal Government’s commitment to fast-track the provision of compressed natural gas to ease mass public transportation which hugely dependent on diesel.
VAT on Diesel: Further Insight
Going back to memory lane, it is pertinent to state that According to the National Bureau of Statistics, NBS in Nigeria, Diesel experienced an 8.5% increase in price for August 2023 alone. This increment has continued to put diesel on the rise since the unrest in Russia started.
The decision by the presidency has met with different reactions. In this light, the Independent Petroleum Marketers Association of Nigeria (IPMAN) through its spokesperson, Mr.Chinedu Ukadike commended the move by the Federal Government but warned that it is a permanent solution to the price increase trajectory.
His words as culled from the Tribune recently:
“It is a welcomed development because we are not happy with the high cost of diesel in the market and this relatively affects the prices of goods and services in the market thereby causing inflation.
“As marketers, the removal of VAT on AGO will also bring down the price but this is not a permanent solution. The most important thing is to look at putting our refineries to work as well as the modular refineries to produce diesel for consumers.
“AGO is used to power our trucks and machines and for industrial use. It will add to factors of production which invariably will increase the price of petroleum products.”
See other Reactions
The africataxreview team was able to gather varying reactions of Nigerians trailing the development on X (Twitter) thus:
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