By Patience Chat Moses
The Federal Government has announced the removal of value-added tax (VAT) on diesel for the next six months as part of measures to cushion the effects of the removal of the petrol subsidy on Nigerians.
The waiver is part of the resolution reached by the Federal Government and leadership of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) at the end of a four-hour meeting held at the State House on Sunday.
Speaking at the end of the four-hour meeting with the leaders of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) at the State House, Abuja, the Chief of Staff, Femi Gbajabiamila, said the Government team and the labour leaders have reached some resolutions.
In a statement issued at the end of the meeting, Mohammed Idris, Minister of Information and National Orientation, added that the Federal Government is “committed to fast-tracking the provision of compressed natural Gas (CNG) buses to ease public transportation difficulties associated with the removal of PMS subsidy”.
He indicated that the Government would also see to the provision of funds for micro and small-scale enterprises, adding that the value-added tax (VAT) on diesel will be waived for the next six months.
“The Federal Government will commence payment of N75,000 to 15 million households at N25,000 per month, for a three-month period from October-December 2023.
“A sub-committee is to be constituted to work out the details of implementation of all items for consideration regarding government interventions to cushion the effect of fuel subsidy removal.
“NLC and TUC will consider the offers by the Federal Government with a view to suspending the planned strike to allow for further consultations on the implementation of the resolutions above,” the statement read in part.
While addressing journalists, the President of NLC, Joe Ajaero, said the labour body would take all the promises by the Government to its organs for consideration.
Also, the Acting President of TUC, Tommy Etim Okon, stated that the Union would confer with their respective organs for the next line of action.
VAT is a consumption tax which is administered by the Federal Inland Revenue Service (FIRS).
It was introduced in Nigeria with the enactment of VAT Act No. 102 of 1993, which replaced the Sales Tax, which had been in operation since 1986 by the Federal Government Decree No. 7 of 1986.
In January 2020, VAT was revised from five per cent to 7.5 per cent after former President Muhammadu Buhari signed the Finance Act 2020 into law.