The federal government says it has no imminent intentions to apply the 5% fuel levy outlined in the newly passed Tax Administration Act 2025.
Wale Edun, Minister of Finance and Coordinating Minister of the Economy, addressed a news conference about this in Abuja on Tuesday.
The minister’s statement follows various concerns regarding the implementation.
On September 7, the Trade Union Congress of Nigeria (TUC) rejected the federal government’s planned 5% tax on petroleum goods, calling it “economic wickedness” against already overburdened Nigerians.
Speaking about the tax, Edun stated that the surcharge was a long-standing provision initially implemented in 2007 under the Federal Road Maintenance Agency (FERMA) Act, not a new tax measure created by President Bola Tinubu’s government.
According to the minister, the surcharge’s inclusion in the 2025 Act is part of efforts to consolidate and harmonise current regulations to improve clarity and 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 new tax. It doesn’t mean fresh taxation automatically,” Edun said.
The minister said the new law would not take effect until January 1, 2026, and even then, any implementation of the surcharge would require a formal commencement order by the minister of finance, 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.
Edun added that the government’s broader tax reform effort is a long-overdue overhaul of the country’s fragmented tax system.
He said that the tax administration act is one of four legislative instruments passed to improve transparency, simplify compliance for individuals and businesses, and modernise revenue collection.
“This is a transformational legal document, ” the minister said.
Edun added that the process of preparing the reforms followed years of consultation, technical work and collaboration.
The minister stated that transitioning from legislation to implementation would necessitate extensive preparation, including institutional restructuring, capacity building, and public sensitisation.
He stated that despite increased public scrutiny and economic pressure on households, the current administration remains dedicated to macroeconomic stability and private-sector-led prosperity.
Furthermore, Edun stated that the purpose of the tax reforms was not to impose new taxes on Nigerians, but to build a more transparent and effective tax system that reduces leakages, increases efficiency, and fosters investor confidence.
“This government is fully aware of the economic pressures of the time and will not take decisions that will make things even more burdensome,” he said.
“Our priority is to strengthen tax governance, block revenue leakages, and improve efficiency rather than just levy new taxes, charges, and costs.”
The minister stated that continuing macroeconomic reforms have begun to produce benefits, including improved investor mood and recent confirmations from development partners and international rating agencies.
He emphasised the importance of adequate communication and execution of the new tax structure in the coming months.
“As you know with all policies, once the policy is passed into law, the next step is implementation,” he said.
Edun added that “there will be publicity, sensitisation, education and information on the new tax law”.
