Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has defended the five per cent fuel surcharge currently generating public backlash, insisting it is not a new tax but an existing law that has been dormant since 2007. Nigerians have become agitated and angry about the five per cent fuel surcharge lamenting the same government that claimed it will use subsidy money for infrastructure is coming back through the back door to collect more tax.
According to Oyedele, it is not a new tax. It was first introduced into law in 2007, and the intention was to collect that five per cent and use it to fix roads. But it was not implemented because the government was paying subsidy. The law has always been there.
The proceeds are to be shared between the federal and state governments, 40 per cent to the centre and 60 per cent to the states.
why now with current hardship in the country?
Oyedele in his defense explained the real problem is not the surcharge itself but the terrible state of our road network. The reason why moving goods around in Nigeria and travelling is a nightmare is because the roads are bad.
This was meant to be a way of addressing that problem. Globally, including in many African countries, between 20 and 80 per cent of the pump price of petrol goes into charges and levies used to repair and maintain roads. Ours is even lower, he added.
Nigerians say they don’t trust the government with using the funds.
That is a legitimate concern. The reason why people are angry is because they do not trust the government. The solution is to create a governance structure that ensures transparency and accountability.
Let’s publish how much you’ve collected and the road you are fixing. Put videos, put photos, and let us track it together. That is how we can build trust.
When exactly will this surcharge commence?
The law requires a commencement date to be announced and gazetted by the Minister of Finance before it can take effect. So, it cannot just be implemented arbitrarily.
In fact, the government can even time it so that pump prices do not rise. For example, when the naira appreciates or crude oil prices fall, if you add the surcharge then, the price remains the same. That is the sensible way to go.
But critics say this government is piling new taxes on Nigerians.
That is not correct. One of the first executive orders President Tinubu signed suspended four taxes. So, it is unfair when people accuse this government of introducing new ones.
I challenge anyone to give me an example of a new tax this administration has introduced. There is none.
Labour unions have threatened a strike over this.
I was disappointed with TUC and NLC. Some months ago, they even called for the entire tax reform bill to be withdrawn. That was shocking, because this bill clearly benefits workers.
If they don’t like a provision of the law, the proper way is to sponsor an amendment in the National Assembly. It is not by strike. We need to respect processes.
Let’s talk about other aspects of the reforms. What is the top-up tax?
The top-up tax is targeted only at very large companies, with turnover above N50 billion, or multinationals paying less than 15 per cent effective tax.
If your effective tax is below 15 per cent, you must top it up. That is the global standard to protect our tax base.
What about the capital gains tax?
Previously, everyone paid a flat 10 per cent. That was unfair. Now, we have moved to a progressive structure. Low-income earners pay nothing, the middle class pay less, and only high-net-worth individuals pay up to 25 per cent. That is fairness.
We also provided exemptions-for the sale of a primary residence, up to two cars, and shares not exceeding N150 million in a year.
Before now, the exemption was only N3,000 a year. We have moved it forward to say if you earn up to N100,000 a month, you should not be paying tax at all. That means N1.2 million annually is exempt.
So, the poor and middle class will pay less. But the very wealthy, those earning above N60 million annually, will pay up to 25 per cent. That is how to make the system fairer.
Some experts have said Nigeria’s tax laws are too fragmented.
That was part of the problem we addressed. The reforms harmonised multiple conflicting provisions into four acts.
We also ensured that 100 per cent of stamp duty revenue now goes to the states. In the mining sector, we are not rushing to tax. Instead, we are giving incentives, including tax holidays, so that mining can grow into a sector bigger than oil and gas in the future.
Also, misinformation has been a big challenge. Bad news sells very fast. If you put something false and negative, it goes viral. If you put something positive, nobody shares it.
The laws are written in black and white. Nigerians should read them instead of relying on social media influencers who are not experts.
Finally, are you discouraged by the backlash?
Not at all. Everywhere in the world, reforms are hard. The government should understand that and hold the obligation to explain to the people, be sincere with them, and be consistent. Over time, people will appreciate that the government means well for them.
Petroleum charge not new, only harmonised – Finance minister
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has dismissed reports that the recently signed Tax Administration Act 2025 introduces a new 5% fuel surcharge, clarifying that the levy is not new but only harmonised under the law.
Speaking at a press conference in Abuja on Tuesday, Edun said the inclusion of the surcharge in the Act was part of efforts to consolidate and streamline existing tax laws for clarity and ease of compliance.
“It is important to make this distinction. The inclusion of the surcharge in the 2025 Nigeria Tax Administration Act does not mean an automatic introduction of a new tax. It doesn’t mean fresh taxation automatically,” the minister said.
The surcharge, which recently drew criticism from labour unions and civil society organisations, was originally created to fund road maintenance, with 40% of proceeds allocated to the Federal Roads Maintenance Agency (FERMA) and 60% to state-level equivalents.
Concerns grew after the levy was referenced in the consolidated Act, sparking fears of additional burdens on fuel costs beginning in 2026.
Edun explained that the new law will only take effect from January 1, 2026, and even then, implementation would require a commencement order issued by the finance minister and published in an official gazette.
“There is a whole formal process involved, and as of today, no order has been issued, none is being prepared, and there is no plan. There is no immediate plan to implement any surcharge,” he said.
The minister further defended the government’s broader tax reform efforts, describing them as a long-overdue overhaul of Nigeria’s fragmented tax system.
He said the Tax Administration Act is one of four legislative instruments recently passed to improve transparency, simplify compliance for individuals and businesses, and modernise revenue collection.
FG gazettes tax reform laws
Meanwhile, Nigeria’s long-awaited tax reform laws have been officially published in the government gazette, marking a major step in overhauling the country’s fiscal framework.
The reforms, signed into law on June 26, 2025, establish a new foundation for taxation, administration, and revenue collection in Africa’s largest economy.
The four new legislations are the Nigeria Tax Act (NTA), 2025, Nigeria Tax Administration Act (NTAA), 2025, Nigeria Revenue Service (Establishment) Act (NRSEA), 2025, and Joint Revenue Board (Establishment) Act (JRBEA), 2025.
Confirming the publication on his official X handle, Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, noted that the new laws would modernize Nigeria’s tax system, improve compliance, and create a more business-friendly environment. Dailytrust.
