The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has explained that the proposed 5% fuel surcharge will not take effect until key economic conditions improve, particularly a stronger naira or a fall in global crude oil prices.
Speaking at the Haulage and Logistics Magazine Conference and Exhibition in Lagos, Oyedele said that although the surcharge is a good policy aimed at funding road maintenance, introducing it now would worsen the financial burden on Nigerians.
According to him, the fuel surcharge was first introduced during the administration of former President Olusegun Obasanjo to allocate part of fuel revenues for road repairs, 40% for federal roads and 60% for state and local government roads.
‘The idea is brilliant and already being implemented in more than 150 countries,’ Oyedele said, adding that most of Nigeria’s 200,000 kilometres of roads are in poor condition.
He clarified that although the Federal Roads Maintenance Agency (FERMA) had requested to start collecting the levy after fuel subsidy removal, the committee rejected the proposal.
‘We said no,introducing such a tax now would be insensitive,’ he stated.
Oyedele added that the committee included the surcharge in the draft tax law but attached a safeguard requiring the Minister of Finance to issue an official order before it takes effect.
‘For me, the right time will be when the naira strengthens or crude prices drop, so the surcharge won’t raise pump prices,’ he said.
He also assured that the ongoing tax reforms would bring relief to the haulage and logistics sector by eliminating multiple taxation, reducing costs, and improving efficiency.
‘We are not introducing new taxes; we are removing the many duplicated ones that frustrate transporters and increase prices,’ he said.
Oyedele explained that under the new policy, small transport and logistics businesses with annual turnover below N100 million will be exempted from company income tax, while eligible operators will benefit from VAT refunds and tax incentives.
He added that the reforms aim to simplify Nigeria’s tax system and ensure transparent and efficient revenue sharing across all levels of government.