The proposed 5% fuel surcharge (tax) will not take effect until Nigeria’s key economic indicators improve, particularly an appreciation of the naira or a decline in global crude oil prices, according to Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.
Speaking at the Haulage and Logistics Magazine Conference & Exhibition in Lagos, Oyedele said that while the fuel surcharge was a well-conceived policy to fund road maintenance, implementing it now would exacerbate financial hardship for Nigerians.
He explained that the surcharge, first introduced during former President Olusegun Obasanjo’s administration, was designed to channel part of fuel revenues toward road repairs — 40% for federal roads and 60% for state and local government roads.
“The idea is brilliant and already being implemented in more than 150 countries,” Oyedele noted, highlighting that most of Nigeria’s 200,000 kilometres of roads remain in poor condition.
He revealed that although the Federal Roads Maintenance Agency (FERMA) had sought to begin collecting the levy immediately after fuel subsidy removal, the committee rejected the proposal.
“We said no – introducing such a tax now would be insensitive,” he stated.
According to Oyedele, the draft tax law includes the surcharge but with an important safeguard — it cannot take effectuntil the Minister of Finance issues an official order authorizing its commencement.
“For me, the right time will be when the naira strengthens or crude prices drop, so the surcharge won’t raise pump prices,” he added.
Oyedele further assured stakeholders that the ongoing tax reforms would bring relief to the haulage and logistics sectorby eliminating multiple taxation, cutting operational 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.
Under the new policy framework, small transport and logistics businesses with an annual turnover below ₦100 million will be exempt from company income tax, while eligible operators will also benefit from VAT refunds and targeted tax incentives.
He concluded that the reforms aim to simplify Nigeria’s complex tax system, promote transparency in revenue collection, and ensure equitable distribution of funds across all tiers of government.
