2012 in retrospect: A year of tax frenzy like no other

From tax policies, administrative reforms, and tax cases to new regulations, amendments to existing legislation and so on, there was not a dull moment in 2012 across all levels of government locally and across the globe.

The year started on a rather shaky note in Nigeria with the unpopular proposal to remove fuel subsidy. The total removal was later changed to a reduction in subsidy following protest by various groups and stakeholders. In tax parlance, subsidy is in principle a “negative tax” which means government pays you rather than the other way round.

If and when the subsidy on all fuel products is completely removed, then other secondary taxes are likely to kick in such as VAT, import duties and levies on fuel products. These taxes are currently not being imposed as a result of the subsidy regime.