Nigerians have begun to lament the effects of the introduction of a 7.5 per cent Value-Added Tax on the price of premium motor spirit, otherwise known as petrol.
This comes barely a month after President Bola Tinubu removed the subsidy on petrol during his inaugural speech on May 29, raising the price of PMS from N188 to about N580 in different states of the federation.
Recall that the Minister of Finance, Budget and National Planning, Zainab Ahmed, announced that the Finance Act 2020 raised the previous 5 per cent VAT of the country to 7.5 per cent on commodities including automobile gas oil and it was implemented on February 20, 2020. But the VAT-exempt items include honey, bread, cereals, cooking oils, culinary herbs, fish, flour, starch, fruits, meat, poultry, milk, nuts, pulses, roots, salt, vegetables, water, sanitary pads, tampons, tertiary, secondary, primary and nursery tuition.
While other commodities have been VAT-compliant, PMS was not until recently because it was being subsidised by the Federal Government. However, the new development has hit Nigerians hard, as many have called for an utmost review of it, especially because of the recent removal of fuel subsidies.A user, Ingawa said, “That means for every litre of AGO you will buy, you have to pay 7.5% Consumer Tax of the Pump Price. For example; If 1 litre of AGO is N650 at the filling station, then you have to pay an additional N48.75 being payment for 7.5% VAT. The total price per litre will be N698.75 per litre.
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