Nigerian Government to start charging VAT on diesel imports

The Federal Inland Revenue Service (FIRS) has issued a letter to diesel suppliers in Nigeria, informing them that they are required to pay value-added tax (VAT) on automobile gas oil (AGO) or diesel imported into the country.

The letter was forwarded by the Assistant Comptroller-General of Tariff and Trade, MBA Musa IN, on behalf of the Deputy Comptroller-General of Tariff and Trade to diesel suppliers.

According to the letter, which was dated June 8th, 2023, and addressed to diesel suppliers. It cited an FIRS letter dated 31st May 2023.

According to the letter, the VAT Modification Order 2021 only exempts petroleum products of HS codes 2709.00.00.00 – 2710.19.12.00 from paying VAT. AGO or diesel falls under HS Code 2710.19.21.00 and is not exempted from paying VAT.

Therefore, all future importations of the product should assess and pay VAT at the point of entry into the country.

The letter also stated that AGO or diesel are not exempted from destination inspection or import guidelines and as such are expected to process Form M and PAAR as well as make declarations appropriately in the NICIS II system.

The decision to charge VAT for diesel importations is stated to be in compliance with the VAT Modification Order 2021.

Contents of the letter

• “I am directed to forward a letter from Federal Inland Revenue Service on the above subject matter. The VAT Modification order 2021 only exempts Petroleum products of HS codes 2709.00.00.00 – 2710.19.12.00 from payment of VAT. AGO or Diesel falls classifiable under HS Code 2710.19.21.00 and is not exempted from paying VAT.”
• “Subsequent upon the above, all future importations of the product should assess and pay VAT at the point of entry into the country.”
• “Also note that AGO or Diesel are not exempted from destination inspection or import guidelines and as such are expected to process Form M and PAAR as well as make declarations appropriately in the NICIS II system.”