In its efforts to increase revenue in this economy downturn, the Federal Government may begin to collect tax from Nigerians on petrol, diesel, kerosene and other petroleum products they consume.
In a report made available to the Ministry of Finance, the Petroleum Products Pricing Regulatory Agency, PPPRA, disclosed taxation of petroleum products is revenue potential for Nigeria.
The PPPRA says the introduction of taxes on petroleum products will supplement the revenue lost due to the fall of oil prices at the international market. It said the revenue potential from taxation of petroleum products was enormous, given the average national daily consumption of the products.
The report, which was put together after the two-day National Revenue Retreat in Kano, showed that the average national daily consumption of fuel was 45 million barrel, diesel nine million barrel and aviation fuel, 1.5 million barrel.
It also revealed that there were three different taxes that could be charged which the PPRA’s pricing template did not currently accommodate. These are Highway Maintenance, Government Tax, Import Tax and Fuel Tax.
“Fall in government’s revenue from oil sale receipts and budget deficits in the face of compelling demand have made it imperative that the nation begins to examine the next step in the petroleum downstream business in Nigeria.
“Deregulation remains the key to achieving a self-sustaining downstream sector as well as the stimulation of the economic growth and social wellbeing of the populace.
“Environmental tax, consumption tax, fuel tax, VAT, Import and Excise tax, when included in the final pricing of petroleum products provides opportunities for petroleum products to provide direct funds for other sectors,” it said.
Also, PPPRA made available to the government, the option of privatisation of refineries as another way for revenue generation. It also suggested that the Downstream Logistics Facilities should also be privatised.
