In what can only be described as a whirlwind start to his presidency, President Bola Ahmed Tinubu has ushered in a month of highs and lows for the Nigerian people. With his swift and decisive actions applauded by some and decried by others, the nation finds itself navigating through a complex web of changes that have both positive and negative implications.
One of the most notable consequences of President Tinubu’s tenure thus far is the significant hike in the price of Premium Motor Spirit (PMS) following the removal of fuel subsidies. This abrupt increase has placed a heavy burden on ordinary citizens who now face the challenge of adjusting their budgets to accommodate the surge in fuel costs. Additionally, rumors of an impending imposition of Value Added Tax (VAT) on PMS have further fueled anxieties among Nigerians, who fear the potential for even greater financial strain.
Adding to the concerns is an upcoming electricity tariff hike scheduled for July 1, which has only served to unsettle an already weary population. With the removal of fuel subsidies already taking its toll on the Nigerian economy, the prospect of further increases in essential utility costs has left many citizens grappling with the harsh realities of their financial situations.
Kelvin Odanz and Daniel Regha, social media influencers, encapsulate the prevailing sentiment of dissatisfaction and suffering.
Kelvin Odanz took to Twitter, highlighting the abruptness and magnitude of the changes, tweeting, “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.”
Daniel Regha echoed these sentiments, expressing discontent with the current government’s policies that seemingly neglect the needs of the masses.
As the nation grapples with these challenges, the rumors surrounding the implementation of a tax on PMS loom ominously. Nigerians, already burdened with soaring inflation, anxiously await further details and brace themselves for the potential impact on their daily lives.
Offering insights into the intricacies of the situation, Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PricewaterhouseCoopers (PwC), shed light on the 7.5% VAT introduced during President Muhammadu Buhari’s administration.
Oyedele emphasized that the VAT Modification Order 2021 limited VAT exemption on petroleum products to specific items, including PMS. This indicates that only diesel would be subjected to the 7.5% VAT, a prospect that raises concerns among the Nigerian population.
Given the recent spike in inflation, which reached a staggering 22.41 percent in May, Oyedele advised President Tinubu to consider suspending the VAT on diesel. Such a measure would help alleviate the negative effects on manufacturers and the production sector, while also preventing further fueling of inflation and reducing the burden on individuals and businesses.
