August 30 (THEWILL) – Concerns have been raised among businesses and households over the introduction of value-added tax (VAT) by the Nigeria Customs Service (NCS).on imported automobile gas oil (AGO) popularly called diesel.
The NCS made this known in a memo, dated July 28, 2023, sent to all importers and agents of diesel intimating them of the new policy..
The memo, titled ‘Request for Charge of Value Added Tax (VAT) on Automobile Gas Oil (ago) or Diesel Imported into the Country’ and signed by PC Chibuoke (DC admin) on behalf of the area controller, Area I, Port Harcourt; made reference to a “headquarters circular No. NCS/T&T/T/899/217/VOL.I of 27 July 2023 on the above subject matter”.
“I am directed to inform you that henceforth, Value Added Tax (VAT) is to be charged on Automobile Gas Oil (AGO), and Procedure Code 4900 000 shall be used on all importations of AGO,” the memo reads.
The Service added that no importer of diesel is allowed to use “additional Code 409 in their declaration”.
THEWILL recalls that in 2020, the Federal Government introduced the implementation of the Finance Act, which stated that a 7.5 percent VAT would be charged on diesel costs.
The Manufacturers Association of Nigeria (MAN) recently lamented over the high cost of diesel price which jumped 55.9 percent in one year as of the early part of the second quarter, according to data by the National Bureau of Statistics (NBS).
The average retail price of diesel paid by consumers rose from a lower cost of N539.32 per litre recorded in the corresponding period of last year to a higher cost of N836.81 per litre.
Nigeria’s rising energy costs have resulted in the country’s jumping inflation and contributes significantly to costs borne by manufacturers who pass the costs to the final consumers.
An industrialist, Joe Amaka, said surging diesel prices will force them to cut jobs, curb operations and raise prices.
He said the matter is worsened by the epileptic power supply in the country as energy accounts for as much as 40 per cent of factories’ costs in Nigeria, quoting MAN.
A Lagos-based baker, Ademola Adefarasin, said their association is at the verge of announcing price increase for bread owing to the high cost of diesel. He regretted that the increase in cost of production will be passed to individual and household consumers.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
