More Trouble For Nigerians As FG Considers Fresh Tax On Petroleum Products, Recharge Cards

The Federal Government wants to impose new tax on petroleum products, non-alcoholic beverages and telecommunications service providers, according to arguments made by the Controller General of the Nigerian Customs Service, Hameed Ali.

Ali made the argument for the new tax while appearing before the House of Representatives Committee on Customs to defend its 2020 Budgetary performance and 2021 proposal.

The proposal of the Nigerian Customs Service Boss for the introduction of new taxes is coming at a time the Federal Government had declared tax reliefs for 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.

This will ultimately increase the burden for Nigerians as these businesses are expected to pass the cost of their services and products on to them.

Based on the argument of the Customs CG, the new tax would introduce a N1.50 levy on each litre of petroleum product imported into Nigeria.

Also the government wants to begin taxing carbonated and all non-alcoholic beverages the same way as alcoholic drinks and tobacco.

A 20 per cent ad-valorem rate is imposed on alcoholic drinks including beer, stout, wines and spirits and tobacco products by the NCS.

For the telcos, service providers would be taxed on the recharge cards they produce, according to the custom boss.

Ali said it was part of strategies to improve revenue generation in 2021 based on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper

The Customs Boss said, “Proportionally, it is the service’s expectation that, as a result of this reform, we will increase the revenue base of the government.’’

He added, “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.”