Revealed: How Tinubu Govt Will Spend New 5% Fuel Tax – States Smile Home With More

President Bola Tinubu’s administration has clarified that the much-debated 5% fuel tax is intended to finance road maintenance, with 40% of proceeds earmarked for federal roads and 60% allocated to states.

Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, made the disclosure during an interview on Channels Television’s Morning Brief on Tuesday.

Oyedele explained that the levy was not a fresh initiative by the Tinubu government, but a provision under a 2007 law that was shelved due to fuel subsidies at the time.

“One very important message for people to know is that this surcharge was not introduced by this government. It was introduced in 2007,” Oyedele said. He further stressed that the surcharge was neither part of the tax bills signed by Tinubu earlier this year nor a proposal from the Presidency to the National Assembly.

He added that while the surcharge came up during tax reform deliberations, the final decision was to harmonise tax collection under fewer agencies.

Public anger has trailed reports suggesting the 5% levy will begin in January 2026, with critics calling its timing insensitive amid high fuel costs and soaring inflation. Civil society groups and labour unions have condemned the policy, with the Trade Union Congress (TUC) branding it “economic wickedness” and warning of nationwide strikes if implemented. The Organised Private Sector has also rejected the plan, warning it would stifle already struggling businesses.

Oyedele, however, dismissed the speculation, insisting no date has been fixed for implementation. According to him, the surcharge, when eventually enforced, could provide a long-term solution to Nigeria’s deteriorating road network.

“This is about ensuring our roads are properly maintained. Nigerians will benefit from this in the long run,” he said.