Minister of Finance and Coordinating Minister for the Economy, Wale Edun on Tuesday gave insight into the controversial 5 percent fuel surcharge
integrated into the Federal Roads Maintenance Agency (FERMA) Law of 2007, now part of the Nigeria Tax Act of 2025, explaining that the Federal Government will not implement the levy in 2026.
Reports had indicated that the government plans to begin its implementation in January 2026.
Speaking to journalists in Abuja, the Finance Minister said that the 5 percent surcharge was initially intended as a user charge designed to finance road maintenance and development across Nigeria.
“The 5 percent 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,” Minister Edun said.
According to the Finance Minister, forty percent of the proceeds were allocated to FERMA for the maintenance and upkeep of federal roads, while the remaining 60 percent was allocated to the states, managed through state equivalents of FERMA or state road management agencies.
Edun noted that the original purpose of the surcharge was to ensure better-maintained roads, which are critical for mobility, economic growth, and public safety.
Minister Edun said, while the surcharge has been in existence for over 15 years, its restatement in the 2025 Tax Administration Act aims to clarify and streamline Nigeria’s tax laws, making them easier to understand and comply with.
He emphasised that the tax reform efforts were not just about imposing new charges but about fostering an environment where businesses can thrive and contribute to the growth of the Nigerian economy.
“The reforms aim to strengthen the relationship between the federal, state, and local governments, ensuring better coordination and improving tax compliance across all levels of government.
“Our priority is to strengthen tax governance, block revenue leakages, improve efficiency, rather than just levy new taxes, charges, and costs,” the Minister said.
Edun assured the public that the implementation of the Nigerian Tax Administration Act 2025 would be phased, with a clear timeline and proper sensitization efforts in place.
He stressed that the government would continue to engage with stakeholders and the public to ensure that the reforms are fully understood and implemented successfully.
The Nigerian Tax Administration Act 2025 represents a major reform aimed at modernising Nigeria’s tax system and improving revenue mobilisation, and consolidates multiple tax laws into a single, streamlined framework, simplifying compliance for individuals, and businesses.
It also seeks to eliminate overlapping taxes and charges, which have been a source of confusion and inefficiency within the system.
The Act is set to become operational on January 1, 2026, after extensive consultations, public awareness campaigns, and technical preparations have been completed.
NewsQuest reports that the surcharge will only take effect when the Minister of Finance issues a formal commencement order, which must be published in the official gazette, a safeguard that allows the government to carefully consider economic conditions before implementation.
