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FG introduces sugar tax on non- alcoholic beverages

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THE Federal Government has introduced sugar tax on non-alcoholic beverages.

Minister of Finance Zainab Ahmed said the tax became law to discourage excessive consumption of sugar in beverages.

She said this while giving a breakdown of the highlights of the 2022 Appropriation Act in Abuja on Wednesday.

Ahmed explained that the sum of N10 per litre had been imposed on sweetened beverages as part of critical policy thrusts of the Finance Act 2021.

She said, “In section 17 of the Finance Act, there is a law that has imposed a duty on non-alcoholic carbonated sweetened beverages. There is an excise duty of N10 per litre imposed on all non-alcoholic carbonated and sweetened beverages and this is designed to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions including diabetes and obesity.

“This new sugar tax is introduced to raise excise duties and revenues for health-related issues and other critical expenditures. It is in line with the 2022 budget priorities.”

In 2019, the minister hinted that the government might introduce excise duty on carbonated drinks.

Similarly, she announced that the e-commerce business of non-resident companies would be taxed on a fair and reasonable turnover basis – at 6 per cent of turnover.

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“Such digital services includes apps, high-frequency trading, electronic data storage, online advertising, and several others. The rationale for this is to modernise taxation of ICT and digital economy in line with current realities and this is in conformity with the provisions of the National Development Plan of 2021 – 2025,” she said.

“So if you visit Amazon as an example, we expect Amazon to add a value added tax (VAT) charge to whatever transaction you are paying. We are going to be working with Amazon to agree to register as a tax agent with the Federal Inland Revenue Service (FIRS). So Amazon would collect the payment and remit it to FIRS.

“This is in line with global best practice. They do not need to be registered companies in Nigeria, they just need an arrangement with FIRS where they collect VAT on behalf of FIRS and remit to FIRS,” she explained.

A transparency and accountability advocacy group, Civil Society Legislative Advocacy Centre (CISLAC), recently argued that the increase in taxes, rates and charges did not take into account the economic situation of Nigerians.

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