FG Introduces New Taxes On Beer, Imported Vehicles, Plastics, Others
The federal government has implemented a new set of taxes on alcoholic beverages, imported automobiles, and single-use plastics.
This information was made public in the new Fiscal Policy Measures (FPM) for 2023 and a Circular dated 20 April 2023 signed by Zainab Ahmed, Minister of Finance, Budget, and National Planning.
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Mr. Taiwo Oyedele of PricewaterhouseCoopers disclosed on his official Twitter account the specifics of the new tax regime contained in the new Fiscal Policy Measures (FPM) documents and approved by President Muhammadu Buhari.
The Nigerian government will now charge N75 per litre of imported beer or stout. In 2023, the Minister of Finance, Zainab Ahmed, announced that N75 per litre will be levied on “beer and stout, including all alcoholic beverages and beer not made from malt, whether fermented or not.” In 2024, this new excise duty on beer and stout will rise to N100 per litre.
Prior to the implementation of the new rates, the government taxed imported alcoholic beverages at a rate proportional to the estimated value of the goods or transaction in question. There is now a fixed price, not an estimate.
The same excise rate for beer imports will be applied to wine imports. As of 1 June 2023, two percent of the Import Adjustment Tax (IAT) will be imposed on two-litre engine vehicles, while four percent of the IAT will be imposed on four-litre engine vehicles and above.
On April 20, 2023, the Federal Ministry of Finance Budget and National Planning issued a circular (HMFBNP/MDAs/circular/2023FP/04) informing all Ministries, Departments, and Agencies of the new developments.
The Federal Government has also expanded the list of items that cannot be imported into the country.
The Federal Government has revised the list of prohibited imports to include used motor vehicles older than 12 years from the date of manufacture, as well as Paracetamol tablets and syrups, Cotrimozazole tablets and syrups, Metronidazole tablets and syrups, and Chloroquine tablets and syrups.
Folic acid tablets; Vitamin B Complex tablets (excluding modified release formulations); Multivitamin tablets, capsules, and syrups (excluding special formulations); and Aspirin tablets (excluding modified release formulations and soluble aspirin) are also included.
Others include: Magnesium trisilicate tablets and suspensions; Piperazine tablets and syrups; Levamisole tablets and syrups; penicillin/gentamycin ointments; pyrantel pamoate tablets and syrups; intravenous fluids (dextrose, normal saline, etc.); pharmaceutical waste; and mineral or chemical fertilisers containing nitrogen, phosphorus, and potassium (NPK).
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The Federal Government also imposed a 10% Green Tax in the form of an excise duty on Single Use Plastics (SUPs) such as plastic containers, films, and bags.
A 2% Import Adjustment Tax (IAT) has been imposed on motor vehicles with a displacement between 2,000 and 3,999 cc, while vehicles with a displacement greater than 4,000 cc will be taxed at 4%.
Effective 1 June 2023, “vehicles with a displacement of less than 2000 cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempt.”
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 will take effect on 1 May 2023, subject to a 90-day grace period for importers who opened Form M prior to 1 May 2023.
On the list are rice, woven fabrics, ceramics tiles and sinks, steel, compressed or liquefied gas containers, aluminium cans, washing machines, electric generating sets and rotary converters, smart phones, new and used passenger motor vehicles and electricity metres. The majority of applicable duties remain unchanged from the 2022 FPM rates.
In addition, following the imposition of a five percent excise duty on telecommunication services as mandated by the Finance Act of 2020 and published in the Official Gazette No. 88, Vol. 109 of 11 May 2022, which was approved by the President, a five percent tax will be imposed on mobile telephone services (GSM), fixed telephone services, and internet services – both postpaid and prepaid.
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