Tax Committee Chair Advocates Suspension of VAT on Diesel to Counter Fuel Subsidy Removal

 

Taiwo Oyedele, Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, has suggested the suspension of Value Added Tax (VAT) on diesel as a measure to alleviate the economic repercussions stemming from the elimination of fuel subsidies. Oyedele made this proposal during an appearance on Channels Television's Sunrise Daily breakfast program on Wednesday.

Addressing the pressing need for immediate action, Oyedele emphasized the importance of targeting "low-hanging fruits" within the first 30 days of the committee's operations. Drawing parallels with the removal of fuel subsidies on petrol, Oyedele proposed the suspension of VAT on diesel to counteract the rising prices and potential inflationary effects. He stressed that this proposal was a tentative step toward addressing a prevalent concern.

While Oyedele acknowledged that this suggestion does not guarantee implementation, he emphasized the committee's intention to present it for consideration and discussion. The committee's primary objective during this initial period is to tackle pressing issues that have long been recognized but remained unaddressed.

Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), outlined the broader scope of the committee's agenda. Over the next six months, the committee plans to enact significant tax reforms, streamline tax laws, introduce executive orders, and establish comprehensive regulations. The committee, inaugurated by President Bola Tinubu, has been granted a one-year timeline to execute its policies, with the 30-day, six-month, and one-year phases progressing concurrently.

Notably, Oyedele highlighted the Federal Inland Revenue Service (FIRS) as the most suitable entity for revenue collection on behalf of ministries, departments, and agencies. He also underscored the committee's commitment to addressing excess bank charges and reducing the multitude of taxes and levies imposed on businesses. With the aim of enhancing efficiency and reducing complexities, the committee's vision involves consolidating the number of taxes to a more manageable figure of around 10.

As Nigeria navigates the complex landscape of fiscal reforms and economic adjustments, the insights and proposals put forth by the Presidential Committee on Tax Policy and Fiscal Reforms hold the potential to shape the nation's financial trajectory and alleviate some of the challenges associated with subsidy removal and revenue generation.