CEM REPORT, ENERGY | The Federal Inland Revenue Service (FIRS) has directed the Nigeria Customs Service (NCS) to implement the Value-added Tax (VAT) Modification Order 2021.
The order introduces a charge of 7.5 per cent Value-added Tax (VAT) on Automobile Gas Oil (AGO), otherwise known as diesel, imported into the country.
The NCS in a circular has informed oil marketers in the country of the directive and its intention to fulfil it
The circular which came from Assistant Comptroller-General of Tariff and Trade, MBA Musa IN, on behalf of the Deputy Comptroller-General of Tariff and Trade, noted that all future importations of the product should assess and pay VAT at the point of entry into the country.
“I am directed to forward a letter from Federal Inland Revenue Service on the above subject matter. The VAT Modification order 2021 only exempts Petroleum products of HS codes 2709.00.00.00 – 2710.19.12.00 from payment of VAT. AGO or Diesel falls classifiable under HS Code 2710.19.21.00 and is not exempted from paying VAT.
“Also note that AGO or diesel are not exempted from destination inspection or import guidelines and as such are expected to process Form M and PAAR as well as make declarations appropriately in the NICIS II system.”
While Nigerians are still adjusting to the new pricing of premium motor spirit (PMS), which shot from ₦185 per litre to over ₦500 as a result of the removal of subsidy. Diesel eased from over N700 per litre to about N630 per litre.
But with the implementation of the VAT, the pump price is diesel is expected to rise.