Emmanuel OchayiIn a move aimed at providing relief to the Nigerian populace amidst ongoing discussions about the removal of fuel subsidies, the Federal Government has announced a significant measure to alleviate the economic burden on citizens and to avert the forthcoming strike by the Labour union.
Femi Gbajabiamila, Chief of Staff to President Tinubu, revealed during a four-hour meeting at the State House on Sunday that the government would waive the value-added tax (VAT) on diesel for the next six months.
This announcement came as part of the ongoing negotiations between the Federal Government and the leadership of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) to address concerns stemming from the removal of the subsidy on Premium Motor Spirit (PMS).
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The meeting, held on October 1, 2023, sought to find solutions to the dispute arising from the subsidy removal and its impact on the Nigerian workforce and economy. As part of the resolutions reached during the meeting, several key points were highlighted:
- Provisional Wage Increment: The Federal Government has offered a provisional wage increment of N25,000 for all treasury-paid federal government workers over the next six months.
- CNG Buses: In an effort to mitigate the challenges associated with the subsidy removal, the government is committed to expediting the provision of Compressed Natural Gas (CNG) buses, aimed at easing public transportation difficulties.
- Support for Small-Scale Enterprises: The Federal Government has pledged to provide financial support to micro and small-scale enterprises, recognizing their crucial role in the nation’s economy.
- VAT Waiver on Diesel: Notably, the government has granted a six-month VAT exemption on diesel, a move that is expected to provide some relief to both consumers and businesses.
The decision to waive VAT on diesel comes in response to rising concerns over the increasing cost of Automotive Gas Oil (Diesel). According to the National Bureau of Statistics, the average retail price of diesel surged by 8.57% in August 2023.
Consumers were paying an average of N854.32 per litre, compared to N786.88 per litre in the same month the previous year.
The decision to temporarily remove VAT on diesel is expected to provide some respite to Nigerian consumers and businesses grappling with the economic implications of fuel subsidy removal while fostering ongoing discussions on a comprehensive resolution.
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