The Presidential Fiscal Policy and Tax Reforms Committee has clarified widespread concerns surrounding the alleged introduction of a 5 percent surcharge on fuel under Nigeria’s new tax laws, stating that the charge is not new and does not amount to an additional burden imposed by the current administration.
According to the committee, the surcharge already exists under the Federal Roads Maintenance Agency (Amendment) Act of 2007 but has only been restated in the new Tax Act for the sake of harmonisation and transparency. It emphasized that the provision was not part of the original tax reform bills submitted by President Bola Tinubu to the National Assembly.
“The surcharge will not take effect automatically when the new tax laws commence in January 2026. Implementation can only begin when the Minister of Finance issues an order published in the Official Gazette,” the committee explained.
It further clarified that the levy would not apply to essential household energy products such as kerosene, liquefied petroleum gas (LPG), compressed natural gas (CNG), and clean renewable energy products, in line with the country’s energy transition goals.
On why the surcharge has not been abolished despite the prevailing economic hardship, the committee said it is designed as a dedicated fund for road infrastructure. If effectively implemented, it would reduce travel time, lower vehicle maintenance costs, and cut logistics expenses — benefits that could ease inflationary pressures in the long term.
While savings from the removal of fuel subsidy remain part of the government’s fiscal strategy, the committee stressed they are insufficient to meet Nigeria’s recurring road infrastructure needs. “A dedicated fund ensures reliable and predictable financing for road projects, complementing the national budget,” the statement read.
The committee also dismissed claims that the surcharge contradicts the administration’s reform objective of easing the tax burden. It pointed out that several charges affecting households and small businesses, including VAT on fuel, excise tax on telecommunications, and the cybersecurity levy, have already been scrapped or suspended.
By incorporating the surcharge into the harmonised tax framework, the government said it is laying the groundwork for sustainable road financing and preparedness for future challenges, including climate change impacts.
