By Adekunle Adekoya
Happy New Year to all Nigerians, especially those who read this newspaper and this column. The year that ended about 48 hours ago was one hell of a year, by way of experience, particularly for those of us in Nigeria. On the political front, it was as interesting as ever, what with shameless defections from opposition parties to the ruling party especially by governors and legislators in opposition-controlled states.
Economically, it was only towards the end of the year that some relief, however palpable, began to manifest, with the price of rice, which is the staple most consumed by Nigerians, coming down. The downside on the dining table was that the cost of protein — eggs, fish and meat — refused to follow rice in the downward journey, thus posing a stiff challenge to many households, majority of whom just cooked the staples, mainly carbohydrates, without the protein to make the diet meaningful for the body. Nevertheless, we survived that.
In this new year, the buzz word is tax. Middle of last year, or thereabouts, new tax laws were enacted, which government and ists officials and apologists claim will usher a new life for all of us. I have always supported the position that more equity needs to be brought into the taxation system we were operating. It seemed that only salaried workers paid tax in Nigeria. The legion of artisans, hawkers, traders, workmen and other self-employed people remained outside the tax next, but were among those who shout loudest when there are power outages, or encounter bad roads, or some other infrastructure deficit.
One class of artisans in that category are those who mend, inflate/deflate, change tyres for motorists. We call them vulcanisers. They increase the charges for their services at will and with rapidity. Just about five years ago, it cost just N100 to “gauge” a tyre. Now it is N500. If you had to treat a leakage or puncture, involving removal from the rim/wheel, you’d end up spending at least N2,000-N3,000. And they don't pay tax. They also incur little costs as they don’t rent shops, being comfortable operating at roadsides and street junctions. They, and other artisans and workmen, ought to pay tax. I have always advocated that the tax net be widened; not for government to increase taxes in a country with massive infrastructure deficit like ours.
So, tax is the most talked about thing now. The social media, including WhatsApp groups are awash with posts advising people on how to cope in the new tax-compliant Nigeria. While people should pay their tax, I am of the opinion that government retains the responsibility to provide the wherewithal, nay, the enabler that will make tax paying a walk in the park for Nigerians, and this is leading me to the issue of petrol price. Right now, in the Lagos area, one litre is being sold at between N739 and N800, depending on which marketer you’re buying from. Up North and in the south-East, it can be nearer N1,000 or more.
Under the fuel importation regime, the following template was used to determine the price per litre of petrol:
1. FOB cost: N434.32
2. Freight cost: N86.48
3. Insurance cost: N10.58
4. Lightering cost: N23.45
5. Jetty depot fees: N15.35
6. Storage fees: N12.58
7. Financing costs: N34.67
8. Foreign exchange costs: N23.45
9. NPA charges: N10.58
10. NIMASA charges: N5.29
11. Customs duties: N51.17
12. Other levies and charges: N50.00
Total landing cost: N1107.00
Since none of the government-owned refineries are working, it means that the NNPC is neck-deep in the business of importing refined products. I have a suspicion that the pricing template above is still in use, and in fact, is being used to price the products that Dangote churns out from his refinery. If that were not the case, NNPC would long have gone out of the business of products importation and refining.
Therefore, if government is truly for the people by the people, this pricing template ought to be jettisoned altogether. And if not, mainly because of entrenched interests, some of the charges that applied, as listed above, should be scrapped. I suggest financing costs, NPA charges, NIMASA charges, and Customs duties betaken out altogether. This will shave off N101.71 from the pump price, and result in a price reduction whose ripple effect in the transport sector will initiate a cascade of prices, especially that of foodstuffs and other products and services.
This will generate relief by catalysing productive activities, which in turn will make people earn more and be able to pay their taxes with greater ease. I am of the opinion that the National Assembly take this up and cause the executive to deal with the pricing template in a way that will result in greater relief for the average Nigerian. Going into the election season, it is one thing that this government can do. To achieve a new beginning for all Nigerians, I urge action in this direction, and with urgency.
*Adekoya is a commentator on public issues
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