Financial Energy Review
The Federal Government is set to Raise N1.50 on petroleum products through the Nigerian Customs Services. This proposal on new levies and taxes will include taxes on non-alcoholic beverages and telecommunications service providers.
This proposal by the Nigerian Custom is a moves to increase the federal government revenue-generating capacity to fund the 2021 Appropriation Act.
This disclosure was made by the Controller General of the Nigerian Customs Service (NCS), Col. Hameed Ali (Rtd.), while appearing before the House of Representatives Committee on Customs to defend its 2020 Budgetary performance and 2021 proposal.
The Customs boss told the lawmakers that as part of strategies to improve revenue generation in 2021 based on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper, the service introduced the e-Customs, which will make its operations electronic and automated.
“Proportionally, it is the service’s expectation that, as a result of this reform, we will increase the revenue base of the government” he said.
The Customs boss further explained that though the service has already recommended that the government should approve a downward tariff review of the current 35 percent levy on new and luxury imported vehicles to 5 percent in addition to the downward review of commercial vehicles from 35 to 10 percent.
“This is to encourage massive importation of vehicles into Nigeria and further increase the revenue base of the government; also, and most importantly, to reduce smuggling of vehicles through our borders. The complaint has always been that the tariff is too high and, therefore, people are forced to go through the borders to smuggle their vehicles.
“Based on that and now that we have succeeded in reducing these duties, it is our belief that most of the vehicles coming into Nigeria will come through the ports and by so doing, it will create jobs, increase earnings for not only the Customs but also other operatives in the marine sector. So, it is a win-win situation as far as we are concerned” he said.
Ali stated that a levy would now be reintroduced on petroleum products, in addition to the recommendation to the introduction of taxes on telecommunications service providers on the recharge cards they produce, while carbonated drinks would also become taxable soon.
“One of the reasons for us to tax carbonated drinks is that, if we tax alcoholic beverages and tobacco because they are injurious to our health, carbonated drinks, with the content of sugar, are equally injurious to our health.
“Most of the diabetes cases we see today are as a result of consumption of these drinks. So, it is deadly; as deadly as tobacco. Alcohol is less deadly than them. But we are still running a zero excise duty on these companies” he said.
The proposal of the Nigerian Customs Service of the introduction of new taxes is coming at a time the Federal Government had declared tax reliefs for some businesses and individuals due to the devastating impact of the coronavirus pandemic.
However, the government is looking for ways to improve its revenue-generating capacity to be able to fund the 2021 Budget.
