Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr. Taiwo Oyedele, has said the proposed 5% fuel surcharge (tax) will not be implemented until there is a significant improvement in key economic indicators, particularly an appreciation of the naira or a fall in global crude oil prices.
Speaking at the Haulage and Logistics Magazine Conference & Exhibition in Lagos yesterday, he noted that while the surcharge is a sound policy designed to fund road maintenance, introducing it now would worsen the financial strain on Nigerians.
According to him, the surcharge which was first introduced under the ex-president Olusegun Obasanjo administration, was intended to dedicate part of fuel revenues to road repairs — 40% for federal roads and 60% for states and local governments 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 move.
“We said no – introducing such a tax now would be insensitive,” he stated.
The Committee, he added, included the surcharge in the draft tax law but with safeguards 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.
Oyedele also assured that the ongoing tax reforms would deliver significant 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.
