Nigeria Customs insists Coca-Cola, 7up, others must pay excise duty
In view of the nation’s dwindling revenue, Nigerian Customs Service (NCS) has called on Federal Government to review the waver on excise duty granted carbonated drinks producers like Coca-Cola and Seven-Up Bottling Company (7up), saying such measures can no longer be sustained.
Comptroller-General, Nigerian Customs Service (CIS). Col Hameed Ali (rtd), made this position known during stakeholders’ interactive session on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) organised by the Senate Joint Committee on Finance and National Planning.
Ali, who also urged federal government to terminate tax waivers regime granted local companies producing soft drinks, wondered why companies such as Coca Cola, Pepsi cola and other non-alcoholic beverage firms were exempted from paying taxes in Nigeria when they do in other countries they operate.
He noted that the waver granted carbonated drinks makers in 1993 by the defunct Interim National Government of Ernest Shonekan to encourage local firms is no longer feasible.
He noted that Shonekan only approved duties for tobacco alcoholic beverages in the ground that they are injurious to health of citizens. He added that carbonated drinks are also injurious to the health of the people due to the high sugar content.
Ali therefore reasoned that if tobacco and alcoholic beverages companies are paying tax, the carbonated drink manufacturers should also pay taxes.
“The collection on import will reduce because of the trade agreement we have signed. So, if we don’t expand our excise, the collection from Customs will drop.”
While assuring that his agency would general up to N1.2 trillion by year end as it has already collected N830 billion, Ali said the action would boost revenue generation since tariff collection on import would drop in 2021 and beyond due to the trade agreement between Nigeria and neighbouring countries.
Ali’s submission has however earned the support of the Senate President, Ahmad Lawan, who harped on the need for the Federal Government to immediately review the policy.
The review, according to Lawan should not be an “Executive order” but a joint effort between the executive and legislation
He said: “The executive and the legislature should work together to identify all firms that really deserve waivers because I don’t understand why Coca-cola for instance should not pay excise. It is an established company all over the world and it dominates the soft drinks’ industry.”
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