The Federal Government has clarified that the controversial five per cent fuel surcharge captured in the newly signed Nigerian Tax Administration Act 2025 will not take effect immediately.
The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, told journalists in Abuja on Tuesday that the levy was not a fresh tax but an existing provision dating back to 2007.
“The inclusion of the surcharge in the 2025 Nigeria Tax Administration Act does not mean an automatic introduction of a new tax. It doesn’t mean fresh taxation automatically,” Edun said.
According to him, the surcharge was first introduced under the Federal Road Maintenance Agency (FERMA) Act as a user charge to support road maintenance and development. He stressed that the provision had only been restated in the new tax law for harmonisation and transparency.
“The five per cent surcharge has existed since 2007. Its inclusion in the new law is merely for harmonisation and transparency. There is no immediate plan to implement any surcharge, and as of today, no commencement order has been issued or is being prepared,” the minister added.
Road Maintenance Purpose
Edun explained that proceeds from the surcharge were designed to be split between the federal and state levels, with 40 per cent allocated to FERMA for the upkeep of federal roads and 60 per cent channelled to the states through their road agencies.
He emphasised that the original aim was to improve Nigeria’s road network, which is vital for economic growth, mobility, and safety.
No Automatic Commencement
The minister said any implementation of the surcharge would require a formal commencement order, duly published in the government gazette.
“Our priority is to strengthen tax governance, block revenue leakages, improve efficiency, rather than just levy new taxes, charges, and costs,” he noted.
Edun also assured that the government’s tax reform programme would be phased, with proper sensitisation and engagement of stakeholders before any provisions take effect.
Reform and Public Concern
The Nigerian Tax Administration Act 2025 consolidates multiple tax laws into one framework, aimed at simplifying compliance, boosting revenue mobilisation, and eliminating overlapping charges. The Act is scheduled to come into force on 1 January 2026.
Public anxiety has, however, been rising, with trade unions warning of possible protests. The Trade Union Congress recently threatened strike action over fears that Nigerians would face additional fuel costs.
Edun reiterated that government reforms are intended to build trust, create a business-friendly environment, and improve coordination across federal, state, and local levels.
