The Chief Executive Officer (CEO), Gas Initiative Nigeria (GIN), Mr. Taiwo Odediran, has called for the immediate removal of tariffs on importation of containers of compressed Gas into Nigeria to ensure the growth of the gas economy’s aspiration of President Bola Ahmed Tinubu’s administration. .
The CEO, in a statement in Ilorin, the Kwara state capital, opined that the current tariffs of about 67.5 percent would impede growth and development in that sector, if not not urgently reviewed.
He said: “The newly revised Import Adjustment Tax (IAT) of 40 percent for containers of Compressed and or Liquefied Gas which has now brought total tariff payable for this item to 67.5 percent is making a mockery of and establishing a direct huddle 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 tank 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.”
Odediran, who wondered why the Gas Storage Tank, an item crucial to Tinubu’s gas economy’s aspiration could carry the highest taxes in the whole of the nation’s Customs and Excise Tariffs, noted that such excessive tariffs would be counterproductive to the country’s economic growth.
He added: “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.
According to him, 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, adding that tariff should be 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 percent for the importation of this item, more so 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 percent. 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,” Odediran said.