FG doubles down efforts to increase tax on Coke, Pepsi, others
In an apparent revenue constraint and a move to augment same at the expense of prostrate consumers, the Nigerian government has doubled down on its plan to increase tax/VAT on Fast Moving Consumer Goods (FMCGs).
Recall that the Federal Executive Council (FEC) had, recently, at its weekly meeting in Abuja approved the proposed 50% VAT increases on FMCGs, which was subject to implementation after the amendment of the VAT Act by the National Assembly.
As widely reported, Zainab Ahmed, the minister of finance, said the federal government was considering introducing excise duty on carbonated drinks.
She made this known while addressing the media on the sidelines of the ongoing annual meetings of the International Monetary Fund and World Bank Group in Washington, D.C.
Meanwhile, information on the Nigeria Customs Service website shows that excise is currently placed on non-alcoholic beverages, fruit juices, beer, stout and alcoholic beverages.
According to Ahmed, the government is working on maximising existing revenue streams while trying to identify new revenue streams. She noted that the government’s objective was to harness the existing revenue streams that it has by ensuring that enforcement was effective to expand the tax base and also to identify new revenue streams that it could add to expand the revenue base.
“So in expanding the revenue base, we have proposed the increase of VAT but there are also other revenue streams that we are looking at and some of them include the introduction of excise duties on carbonated drinks but there is a process to doing these things.
“Any tax that you are introducing will involve a lot of consultations and also amendments of some laws or introduction of new regulations. What we are trying to do in 2020 is to harness the full potential of revenue mobilisation. The only increase in taxes in 2020 budget is just VAT. Everything else is just maximising the potentials of existing tax streams that we have and we hope that we will be able to do this to be able to move our tax to GDP ratio from the current seven to eight per cent of GDP to 15 per cent,” she said.
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