The Federal government has been commended by
Operators in the organised private sector for removing 7.5 per cent Value Added Tax (VAT) on the price of diesel.
The commendations were made by the Director General of Nigeria Employers’ Consultative Association (NECA), Mr. Adewale-Smatt Oyerinde and the Director General of Lagos Chamber of Commerce and Industry (LCCI), Dr. Chinyere Almona recently.
Oyerinde described the removal of the VAT on diesel as a commendable palliative for all Nigerians, but added that it did not feature in the three topmost priorities of the organised businesses.
He said: “In the context of the priorities we want government to address, the removal of VAT of 7.5 per cent on diesel would not have been our first priority. It may not even rank among the first, second or third priorities that we will want government to address.
“I said that whatever palliative the government gives will be neutralised if the government will not address enterprise sustainability. This is why we said that it must address the income side and the production side concurrently so that one does not neutralise the other.
“We have the issue of multiple taxations, which is being addressed addressed.
Almona said, “the LCCI wishes to commend the federal government’s decision to suspend the VAT on diesel temporarily. We were particularly concerned about the additional cost of 7.5 per cent diesel tax on business operations and its transmission to final consumers.
“The suspension of VAT temporarily on diesel in response to the current economic challenges is laudable. This is comparable to recent VAT rate adjustments across European countries where lower VAT rates on gas, electricity and basic supplies were implemented by EU-member states in response to economic challenges.
“For example, in Germany, to ease the burden of inflation, the VAT rate was reduced on natural gas from 19 per cent to 7.0 per cent until March 2024.
“Also, Belgium cut down energy costs permanently by 6.0 per cent, while the Netherlands reduced VAT on natural gas, electricity, and district heating from 21 per cent to 9.0 per cent. In Ireland, VAT on gas and electricity is reduced to 9.0 per cent for six months.”