For many Nigerians, the first 22 days of President Bola Ahmed Tinubu’s administration have been ‘bitter-sweet.
His quick-fire decisions, hailed by many variously as “bold,” “decisive,” and “correct,” are not without attendant effects that are grim and gruelling for the average Nigerian.For instance, the price of Premium Motor Spirit (PMS) has soared following the removal of fuel subsidy. Recently, there has been speculation of an impending Value Added Tax (VAT) on PMS. An electricity tariff increment scheduled for July 1 has further unsettled Nigerians.The development comes as Nigerians grapple with the harsh economic realities brought about by the removal of fuel subsidy.Two popular social media influencers, Kelvin Odanz and Daniel Regha summed up the sentiment of most Nigerians.
“Fuel subsidy is gone; education subsidy is gone; VAT introduced for diesel, that would drive its price up and affect the cost of goods in the market. Electricity subsidy is about to go off. All these within one month. Too fast. Too much. Nigerians are suffering. We are being suffocated,” Kelvin Odanz tweeted on Monday.Daniel Regha bluntly averred that the current government’s policies were not favourable to the masses.“Tinubu meeting Bill Gates and Dangote in the presidential villa shouldn’t be news. The visit is making headlines, but what has this administration done that favours the masses? From removing fuel subsidies to reportedly planning an increase in electricity tariffs. It’s never about us,” he wrote on Twitter on Monday.
Nigerians, wary of further economic woes that could drive up inflation, are particularly apprehensive about the rumoured tax on PMS.In an exclusive interview with NEWSUPDATES247 on Monday, Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC) explained the nitty gritty of the 7.5% VAT introduced by the past administration of President Muhammadu Buhari.
“The VAT Modification Order 2021 issued by the last administration limited VAT exemption on petroleum products to aviation turbine kerosene, PMS, household kerosene, locally produced liquefied petroleum gas and crude petroleum oils. This effectively means that only diesel is liable to VAT at 7.5%, which the authority now seems to be implementing,” he stated.Due to the spike in inflation to 22.41 per cent in May, he advised President Tinubu to consider removing VAT on diesel to reduce its negative effect on manufacturers and the production sector.
“Given the upward pressure on inflation due to the PMS subsidy removal, the government needs to consider suspending the VAT on diesel to avoid further fueling inflation and compounding the burden on individuals and businesses, especially manufacturers who rely on diesel to power their factories,” he said.Idakolo Gbolade, Chief Executive Officer, SD & D Capital Management, affirmed that the 7.5 per cent AGO VAT is already harming the manufacturing sector. Any other tax at this time and moment, he noted, would be insensitive to Nigerians.
He said: “We know that the previous government has implemented 7.5% on AGO; the news of a 7.5% tax on PMS has not been ascertained. However, the tax on AGO has been impacting the activity of manufacturers, especially those who use their resources to generate power for the running of their plants, and it has added significantly to the cost of doing business. Any other tax, if implemented, would not be acceptable to Nigerians at this point. We are all aware that the new government might be planning to raise revenue through various taxes, but this particular [PMS] tax will be insensitive if implemented by the government now.”
Among those who have called on President Tinubu to put in place palliatives to cushion the effects of his several economic policies is Prof Godwin Oyedokun.The accounting and financial development don of Lead City University, Ibadan, said: “However, the effect will be temporary. The suffering will be momentary, but in the long run, it will benefit the generality of Nigerians.”Gbolade also shared similar optimism, saying: “In all these, I see Nigeria gaining strength with a strong and competitive economy in a very short period.”