FG Implements 7.5% VAT On Diesel, Nigerians Groan
The Federal Government, on Monday, confirmed that it had started the implementation of the payment of 7.5 per cent Value Added Tax on Automotive Gas Oil, otherwise called diesel.
Officials of the Nigeria Customs Service and Federal Inland Revenue Service confirmed this in Abuja, noting that AGO was not exempted from the payment of VAT based on the VAT Modification Order 2021.
The development was, however, condemned by Nigerians, who stated that citizens were still trying to adjust to the hike in the pump price of petrol, not knowing that plans had been perfected to further raise payments for diesel.
In a letter from the NCS to some of its personnel, on the matter, with reference: NCS/T&T/T/899/217/VOL.I, seen in Abuja, and dated June 8, 2023, the service made it clear that VAT must be paid on diesel.
The letter was signed by the Assistant Comptroller-General (Tariff and Trade), Mba Musa, on behalf of the Deputy Comptroller-General (Taritf and Trade).
It partly read, “I am directed to forward a letter from Federal Inland Revenue Service on the above subject matter. The VAT Modification order 2021 only exempts petroleum products of HS codes 2709.00.00.00 – 2710.19.12.00 from payment of VAT. AGO or diesel falls classifiable under HS Code 2710.19.21.00 and is not exempted from paying VAT.
“Subsequent upon the above, all future importations of the product should assess and pay VAT at the point of entry into the country. Also note that AGO or diesel are not exempted from destination inspection or import guidelines and as such are expected to process Form M and PAAR as well as make declarations appropriately in the NICIS II system”.
