Nigerians Will Pay More As FG Introduces New Taxes.

The Federal Government has introduced a new set of taxes on alcoholic beverages, imported vehicles, and single-use plastics in its new tax regime.

The government has also added to the list of items banned from being imported into the country with about a month to the end of President Muhammadu Buhari’s administration.

Under the newly introduced taxes, the Federal Government will charge N75 per liter of beer, stout, or wine imported into Nigeria.

This disclosure is contained in the new Fiscal Policy Measures (FPM) for 2023 in a Circular dated April 20, 2023, and signed by the Minister of Finance, Budget and National Planning, Zainab Ahmed.

The Federal Government said under the new tax regime, N75 per liter will be charged on beer, stout, and imported wine, adding that this new excise duty on beer and stout will be increased to N100 per liter in 2024.

The Federal Government has also revised the import prohibition list with the inclusion of new items.

Also, additional taxes are to be levied on motor vehicles with a 2% new tax on 2-liter engine vehicles, while 4-liter engine vehicles will attract a 4% new tax.Tax on alcoholic beverages to increase from N75 to N100

The details of the new tax regime contained in the new Fiscal Policy Measures (FPM) documents and approved by President Muhammadu Buhari were disclosed by Mr Taiwo Oyedele of PricewaterhouseCoopers on his official Twitter account.

The minister pointed out that N75 per liter will be charged on “beer and stout including all alcoholic beverages and beer not made from malt- whether fermented or not fermented” in 2023, adding that this new excise duty on beer and stout will be increased to N100 per liter in 2024.

Before the new rates, the government taxed imported alcoholic beverages using valorem rates- levying of tax or customs duties) proportionate to the estimated value of the goods or transaction concerned. Now there is a specific rate, not an estimate.

The same excise rate for beer will be applied to the importation of wine.

The Federal Government has also revised the import prohibition list with the inclusion of used motor vehicles above 12 years from the Year of manufacture; Paracetamol tablets Syrups; Cotrimoxazole tablets and Syrups; Metronidazole tablets and Syrups and Chloroquine tablets and Syrups.

Also included on the list are Folic acid tablets; Vitamin B Complex tablets (except modified release formulations); Multivitamin tablets, capsules, and syrups (except special formulations); Aspirin tablets (except modified release formulations and soluble aspirin).

Others are Magnesium trisilicate tablets and suspensions; Piperazine tablets and syrups; Levamisole tablets and syrups; Ointments penicillin/gentamycin; Pyrantel pamoate tablets and syrups; Intravenous Fluids (Dextrose, Normal Saline, etc); Waste pharmaceutiques and Mineral or chemical fertilizers containing the three fertilizing elements nitrogen, phosphorus, and potassium (NPK)

The Federal Government also introduced a Green Tax by way of excise duty on Single Use Plastics (SUPs) including plastic containers, films, and bags at the rate of 10 percent.

Also, under the new tax laws, the Federal Government introduced an Import Adjustment Tax (IAT) levy on motor vehicles with 2-liter engines (2000 cc to 3999 cc) at 2%, while vehicles with 4-liter engines (4000 cc) and above will attract 4% IAT with effect from June 1, 2023.

It also added that with effect from June 1, 2023, vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempted”.

Under the Supplementary Protection Measures (SPM) as it relates to the implementation of the ECOWAS Common External Tariff 2022-2026, the circular stated that the changes are effective from 1 May 2023 subject to the 90-day grace period for importers who had opened Form M before 1 May 2023.

Items on the list include rice, woven fabrics, ceramics tiles and sinks, steel, containers for compressed or liquified gas, aluminum cans, washing machines, electric generating sets and rotary converters, smartphones, new and used passenger motor vehicles, and electricity meters. The applicable duties for most of the items are unchanged from the 2022 FPM rates.