A suggestion has been made by the Petroleum Products Pricing Regulatory Agency (PPPRA) to the Federal Government to introduce taxes on petrol products as supplement for the revenue loss due to the fall of oil prices at the international market.
According to the PPPRA, taxation of petroleum products like fuel, diesel, kerosene and gas holds a huge revenue potential for Nigeria.
In a report made available to the Ministry of Finance at the conclusion of the two-day National Revenue Retreat in Kano, the PPPRA said the revenue potential from taxation of petrol products was enormous, given the average national daily consumption of the products.
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The report from PPPRA showed that the average national daily consumption of fuel was 45 million barrel, diesel nine million barrel and aviation fuel, 1.5 million barrel.
According to the News Agency of Nigeria (NAN), PPPRA revealed that there were three different taxes that could be charged which the PPPRA’s pricing template did not currently accommodate. These are highway maintenance, government tax, import tax and fuel tax.
The report says fall in government’s revenue from oil sale receipts and budget deficits in the face of compelling demand has made it imperative that the nation begins to examine the next step in the petroleum downstream business in Nigeria.
Deregulation remains the key to achieving a self-sustaining downstream sector as well as the stimulation of the economic growth and social well-being of the populace.
Environmental tax, consumption tax, fuel tax, VAT, import and excise tax, when included in the final pricing of petroleum products provides opportunities for petroleum products to provide direct funds for other sectors.
Also, PPPRA made available to the government, the option of privatisation of refineries as another way for revenue generation. It also suggested that the downstream logistics facilities should also be privatised.