The Chief Executive Officer, Gas Initiative Nigeria, Mr Taiwo Odediran, has urged the Federal Government to remove the tariff on the importation of containers of compressed gas into Nigeria.
Making the appeal on Thursday in Ilorin during a news
conference, Odediran said the total tariffs as exemplified under the Customs
and Excise Tariff (CET), and put at 67.5 per cent are antithetical to the
growth of the Gas Economy Aspiration of President Bola Tinubu’s administration.
According to him, the newly revised Import Adjustment Tax
(IAT) of 40 percentage for containers of Compressed and or Liquefied Gas which
has now brought total tariff payable for this item to 67.5 per cent is making a
mockery of and establishing a direct hurdle to the nation’s gas economy
aspirations.
“It is a mild statement to state that the tariff is bogus
and excessive and thus calls for a prompt review.
“There can be no gas utility without its containment or
storage in steel pressure vessels. Gas containers or tanks is a compulsory part
of any gas utility infrastructure.
“Sadly, your administration’s conscious drive towards a Gas
Based Economy is being threatened by the unrealistic tariff on the Storage
Tanks which is one of the key components of Gas Utility as stated above,” he
said.
Odediran atated that at present, the total tariffs on Gas
containers/storage under the Customs and Excise Tariffs (CET) stand at 67.5
percent. These consist of 20 percent ID, 7.5 percent VAT and 49 percentage
IAT.”
He said it was surprising to the stakeholders in the gas
industry to discover that Gas Storage Tank, an item crucial to Tinubu’s Gas
Economy Aspiration, could carry the highest taxes in the whole of the nation’s
Customs and Excise Tariffs.
He noted that the “bogus” taxes on such an item no longer
drive the economic sector of any nation positively.
He said: “As it is widely known, Tariffs have three primary
functions: to serve as a source of revenue, to protect domestic industries, and
to remedy trade distortions (punitive function).
“The revenue function comes from the fact that the income
from tariffs provides governments with a source of funding.
“In the past, the function of revenue was indeed one of the
major reasons for introducing tariffs, but economic development and the
creation of Systematic Domestic Tax have reduced its importance.”
He cited Japan as a typical example of an industrialised
powerful nation that in a few years ago generated about one trillion Yen in
tariff revenue, arguably believed to be less than two percent of her Total Tax
Revenues.
Odediran said if the bogus tariffs are either completely
removed or reduced Nigeria as a nation would earn more income from vast
Domestic Gas Consumption under a Gas Based Economy than possibly from Import
Tariffs on Gas Utility Facilities and tools such as storage or containers.
He noted that “tariff is also a policy tool to protect
domestic industries by changing the conditions under which goods compete in
such a way that competitive imports are placed at a disadvantaged position.
“Unfortunately we are yet to succeed with steel production
in Nigeria. No single mill produces rolled steel sheets which is the sole
material for manufacturing pressure vessels for gas containment and or storage.
“Until then, there can be no significant domestic investment
in manufacturing of pressure vessels for gas containment or storage that
justifies the current outrageous tariff of 67.5 per cent for the importation of
this item, moreso when we desperately need to have a robust gas economy.
“It is a big surprise to us that this aspect, unlike other
items under the Article of Iron and Steel Chapter in the CET, Containers for
compressed or liquefied gas carries the highest taxes of 67.5 per cent.
“We unequivocally believe that this must have either been
done in an error or some economic saboteurs may deliberately be at work to
discourage continued flow of investments in gas infrastructure.
“It is not a rocket science or an abstract economic theory
to know that if Gas must be a common thing on Nigerian streets, the item for
its containment or storage must be easier to come by.
“But, it will remain a tall dream under this ridiculous
tariff of 67.5 percentage on the importation of the Gas Storage Tanks,” he
said.
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