The Nigeria Customs Service (NCS) has officially commenced the application of Value-Added Tax (VAT) on Automobile Gas Oil (AGO), commonly known as diesel, imported into the nation.
This announcement came through a memorandum dated July 28, 2023, distributed to all diesel importers and their agents.
Titled ‘Request for Charge of Value Added Tax (VAT) on Automobile Gas Oil (AGO) or Diesel Imported into the Country,’ the memo, signed by PC Chibuoke (DC admin) acting on behalf of the Area Controller, Area I, Port Harcourt, made reference to the ‘headquarters circular No. NCS/T&T/T/899/217/VOL.I of 27 July 2023 on the above subject matter.’
The memo unequivocally stated, “I am directed to inform you that henceforth, Value Added Tax (VAT) is to be charged on Automobile Gas Oil (AGO), and Procedure Code 4900 000 shall be used for all AGO importations.”
Also, it emphasized that no diesel importers should employ “additional Code 409” in their declarations.
This development stems from the federal government’s implementation of the Finance Act in 2020, which stipulated a 7.5 percent VAT on diesel costs.
As a result, the cost of diesel, which has been experiencing consistent increases, is expected to surge to unprecedented levels. This situation poses further challenges to both Nigerian consumers and manufacturers.
According to data from the National Bureau of Statistics (NBS), in July 2023, the price of a liter of diesel climbed to N794.48, compared to N774.38 per liter during the same period the previous year.
This price hike has raised concerns about its impact on the cost of living and production in Nigeria.
