Home » OIL » Finance Act 2020 May Force Oil Marketers to Close Shop Over 0.5 Percent Tax on Gross Turnover

Finance Act 2020 May Force Oil Marketers to Close Shop Over 0.5 Percent Tax on Gross Turnover

……..as marketers groan under meagre profit margin…….

………by Ben Ndubuwa……..
The Executive Secretary of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), Olufemi Adewole has said that some Oil marketers will close shop by next year due to the introduction of 0.5 percent corporate tax on the gross turnover of petroleum products marketing companies through the finance act 2020.

Adewole explained that this new tax regime will not only eat up the meagre margin but will also further affect their operating cost. “It will even lead to some Companies borrowing from banks to pay the tax” he said.

According to the DAPPMAN Executive Secretary the oil marketing companies runs on volume of turnover but the margin has always been so small. He maintained that the profit margin has always been the same both when they sold PMS at N40 per litre and now that it is sold at N165 to N200 per litre.

However, he explained that both DAPPMAN and Major Oil Marketers Association of Nigeria (MOMAN) are in talks with the government and it’s agencies and particularly the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to ensure that something is done to prevent some Companies going under due to the weight of this new tax regime.

Adewole also express concern over the introduction of 7.5 per cent Value-Added Tax (VAT) to the cost of diesel.

This was just as the immediate-past Group General Manager, Group Public Affairs Division of the Nigerian National Petroleum Company Limited (NNPC), Dr. Kenny Obateru and former General Manager, Nigerian Content at Nigerian Agip Oil Company Limited, Mr. Tajudeen Adigun have faulted the Senate for meddling into the affairs of the Nigeria LNG Limited and its host communities.

They all spoke at the Platform Africa Continental Forum held yesterday in Lagos. The theme of the forum was “Legislation and Business Survival in Africa: A Review of Nigeria’s 9th Parliament and Agenda for the 10th National Assembly.”

Speaking on the legislations that have helped the downstream business and those that have not helped the sector, Adewole said the Finance Act 2020, has not helped petroleum marketers’ business, citing the 0.5 corporate tax provided by the Act, which will take effect by the end of 2022.

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