AEDC: We cannot avoid VAT from meter cost - The Nation Newspaper

John Ofikhenua, Abuja

Following the complaint about the surreptitious manner in which the Abuja Electricity Company (AEDC) has raised the cost of meters, the power firm’s General Manager, Public Affairs, Mr. Oyebode Fadipe, who admitted that the increase in the Value Added Tax (VAT) component of the meter, said it is unavoidable and beyond his company.

A customer of the AEDC had dropped the hint about the increase to The Nation. In a text message which the service provider sent to the customer that our Abuja correspondent sighted, the customer was notified of the directive from the Nigerian Electricity Regulatory Commission (NERC) on the inclusion of five percent VAT to the cost of meters.

According to the message, the balance for the meter made earlier on would be migrated to the meter. The AEDC insisted on deducting the balance from the customers next vending.

The customer said that “It seems AEDC has jerked up the cost of meter surreptitiously. Here is the text I received from them yesterday, which I think is newsworthy.

“Dear Customer, CONTRACT NO…… due to the inclusion of the 5% VAT to the  meter cost by NERC on 31 August 2019, the balance for the meter cost  you earlier made payment will be migrated into your meter and will be deducted upon your next vend. Thank you. [29/11/, 06:31] . I have four meters, and they sent me a similar message for each one.”

The Meter Asset Provider (MAP) regulation that the commission activated this year pegged the cost of a single phase meter at N36,991.50 while the three phase meter is N67,055.85 “VAT exclusive.”

But with the inclusion of the VAT component, according to the AEDC spokesman, the single phase meter is now N38,000 while the three phase meter is above N70,000.

Fadipe said that since the meter prices emanated from a tripartite agreements, there is no way, the AEDC could unilaterally increase it.

He maintained that “there  has not been any increase in the cost of meters. The VAT component is what is being added. VAT is beyond the service provider as AEDC and the MAP provider.

“It is a directive we cannot  avoid. It is not that we surreptitiously or clandestinely or unilaterally increased the cost of meters. By the time you add the component, you find out that the cost of meter before is the cost of meter now. It is an alignment of cost through VAT.

“We are not increasing anything. We don’t even have the power to do that because it is a tripartite agreement so one person cannot unilaterally now decide to increase the cost of meters. In any case, the meter does not belong to us. We are only providing the customers with the MAP providers.”

Continuing, Fadipe said that “When you add the VAT component to it,it will come to N38,000. The three phase meter is N70,000 plus.

“Initially there was no VAT. But now VAT has been added. Those who had not paid VAT before will now pay VAT.  N38,841 for single phase. The VAT component is always 5% and if you deduct it, it should be N1,800 for single phase and N 3,700 for three phase. I think it is the 5% that was applied because I know that there is conversation around whether VAT is going to 7.2%. It is purely VAT and not any other thing.”