LCCI COMMENDS FG’S SUSPENSION OF DIESEL VAT, URGES EXTENSION TO ENERGY, FOOD
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The Federal Government’s decision to temporarily suspend the 7.5 percent Value Added Tax (VAT) on diesel has been praised by the Lagos Chamber of Commerce and Industry (LCCI), which noted that the move is in line with recent changes to the VAT rates in various European nations.
This was disclosed in a statement made yesterday in Lagos by Dr. Chinyere Almona, Director-General of LCCI.
According to her, the chamber was concerned about the additional cost of 7.5 per cent diesel tax on business operations and its transmission to final consumers as it was contributing negatively to high cost of production in the country’s manufacturing sector and other sectors of the economy.
She pointed out that with the temporary removal of the 7.5 VAT on diesel, the chamber urges that the government extends reductions in VAT rates to other energy, fuel and gas prices as well as staple food items in order to relieve businesses and consumers during this period of crippling inflation.
Almona said: “The Lagos Chamber of Commerce and Industry (LCCI) wishes to commend the Federal Government’s decision to suspend the VAT on diesel temporarily. We were particularly concerned about the additional cost of 7.5 per cent diesel tax on business operations and its transmission to final consumers.
“The suspension of VAT temporarily on diesel in response to the current economic challenges is laudable. This is comparable to recent VAT rate adjustments across European countries where lower VAT rates on gas, electricity and basic supplies were implemented by EU-member states in response to economic challenges.
“For example, in Germany, to ease the burden of inflation, the VAT rate was reduced on natural gas from 19 per cent to seven per cent until March 2024. “Also, Belgium cut down energy costs permanently by 6 per cent, while The Netherlands reduced VAT on natural gas, electricity, and district heating from 21 per cent to nine per cent. In Ireland, VAT on gas and electricity is reduced to nine per cent for six months.”
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