On Tuesday, Finance Minister Wale Edun addressed public concerns about the 5% fuel surcharge in the newly signed Tax Administration Act 2025, stating that the federal government has “no immediate plans” to enforce it.
Speaking in Abuja, Edun clarified that the surcharge, originally introduced in 2007 under the FERMA Act to fund road maintenance, is not a new tax under the Tinubu administration. Its inclusion in the 2025 Act aims to streamline existing laws for better compliance.
“It is important to make this distinction. 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.
The surcharge, which allocates 40% of proceeds to FERMA and 60% to state-level agencies, sparked criticism from labour unions and civil society amid fears of increased fuel costs in 2026. Edun emphasised that the law, effective January 1, 2026, requires a formal commencement order to activate the surcharge, adding, “There is a whole formal process involved, and as of today, no order has been issued, none is being prepared, and there is no plan. There is no immediate plan to implement any surcharge.”
Edun defended the broader tax reform, describing the Tax Administration Act as part of four legislative measures to enhance transparency, simplify compliance, and modernise revenue collection. These include the Revenue Service Bill, Joint Revenue Board Bill, and Tax Reform Bill. “This is a transformational legal document,” Edun said, noting the reforms’ evidence-based, consultative approach.
Implementation will involve institutional changes, capacity building, and public awareness campaigns. Edun stressed the government’s focus on macroeconomic stability and private-sector growth, saying, “This government is fully aware of the economic pressures of the time and will not take decisions that will make things even more burdensome.”
The reforms aim to curb revenue leakages, boost efficiency, and enhance investor confidence without imposing new burdens. Edun highlighted early successes, including improved investor sentiment and endorsements from international partners, but acknowledged the need for clear communication during implementation. “As you know, with all policies, once the policy is passed into law, the next step is implementation — robust, careful and effective implementation, timing and sequencing of the various activities,” he said.
