PRESIDENT Muhammadu Buhari has approved increase in some taxes as his parting gifts to Nigerians as he rounds off his tenure.
Buhari is expected to hand over on May 29, 2023 to the president-elect, Bola Tinubu, after exhausting his two terms.
The Federal government has introduced new Fiscal Policy Measures (FPM) for 2023 in a circular dated April 20, 2023.
The circular, signed by the minister of Finance, Budget and National Planning, Zainab Ahmed, is titled, ‘Approval For The Implementation Of The 2023 Fiscal Policy Measures And Tariff Amendments.’
The FPM introduces additional excise duty ranging from 20 per cent to 100 per cent on alcoholic beverages, tobacco, wines and spirits.
Nigeria will begin to tax single use plastic, while five per cent telecommunication tax has been approved.
The taxes will take effect on June 1, 2023, immediately after the end of the Buhari administration.
The document reads in part, “This is to confirm that His Excellency Mr. President has approved the implementation of the 2023 Fiscal Policy Measures made up of Supplementary Protection Measures (SPM) for the implementation of the ECOWAS Common External Tariff (CET) 2022 – 2026 and a revised excise duty rates on Alcoholic beverages, Cigarettes & Tobacco products, as well as introduction of excise duty on Single Use Plastics (SUPs).
“As part of Nigeria’s commitment to climate change adaptation and mitigation to environmental degradation, a Green Tax made up of excise duty on Single Use Plastics (SUPs) and Import Adjustment Tax (IAT) Levy is introduced on Motor Vehicles of 2000 cubic centimetres (cc) and above.”
The changes are effective from May 1, 2023 subject to a 90-day grace period for importers who had opened Form M before May 1, 2023.
The affected items are rice, woven fabrics, ceramic tiles and sinks, steel, containers for compressed or liquified gas, aluminium cans, washing machines, electric generating sets and rotary converters, smart phones, new and used passenger motor vehicles, and electricity meters.
On the revised excise duty rates, additional excise taxes ranging from 20 per cent to 100 per cent increase on previously approved rates for alcoholic beverages, tobacco, wines and spirits have been introduced effective from June 1, 2023.
These are above the 2022 FPM’s approved roadmap for 2022-2024 in the form of new and higher ad-valorem excise duties and specific rates, while the excise duty rate on non-alcoholic beverages was retained at of N10 per litre.
On green taxes, the Federal government will charge by way of excise duty on single use plastics (SUPs) like plastic containers, films and bags at the rate of 10 per cent.
There is also an import adjustment tax (IAT) levy that was introduced on motor vehicles of 2000 cc to 3999 cc at 2 per cent, while it is 4 per cent for vehicles of 4000cc and above.
Vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempted.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.