FG to use VAT to subsidise Electricity Tariff


Proceeds from value added tax will be used to subsidise electricity tariff, according to agreement reached between Federal government and labour.

The subsidy could be as much as N10.20 per kilowatt hour distributed across bands A, B and C for up to three months, said minister of state for labour and employment Festus Keyamo.

The three months is time for the joint technical committee bridging the talks between labour and federal government to complete its scope of work.

The committee, comprising ministries, departments, agencies, Nigeria Labour Congress and Trade Union Congress, was put up to investigate the implementation of service-based tariff which came into effect in September.

Nigerians pushed against the hike in electricity tariff that followed, forcing its suspension for two weeks while the committee met.

Keyamo published the committee’s communique on his Twitter handle @fkeyamo

The committee also decided on distributing six million meters to Nigerians free of charge, in an accelerated mass metering programme.

Central Bank has approved funding, existing stockpiles will be distributed and the cost of the meters recovered from distribution companies.

Among other relief are moves to procure the six million meters from local manufacturers and assemblers, proving jobs and a new meter manufacturing subsector.

The government will move to ensure salary for electricity workers is proteted in a revised payment structure.

National Electricity Regulatory Council will publish monthly allowed billings for unmetred customers to make the capping regulation more effective.

Distribution companies will refund consumers that have evidence of being overbilled during the transition to the service-based tariff. Any evidence of overcharging identified through the adhoc committee scope will also be reimbursed by distribution companies.

Distribution companies will suspend migration of customer to protect them from changes in tariff during the three month period of the joint technical committee.


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