Abuja angling for N124b tax to be borne by consumers
By Jeph Ajobaju, Chief Copy Editor
Abuja anticipates about N124.26 billion revenue yearly from a 0.5 per cent tax on goods imported from outside Africa, enunciated in the Finance Bill 2023 former President Muhammadu Buhari signed into law on May 28, a day before he left office.
The Act says: “In addition to extant customs duties and other approved charges, a levy of 0.5 per cent is imposed on all eligible goods imported into Nigeria from outside Africa to finance capital contribution, subscriptions, and other financial obligations to the African Union, African Development Bank, African Export-Import Bank, ECOWAS Bank for Investment and Development, Islamic Development Bank, United Nations, and other multilateral institutions as may be designated by regulation issued by the Minister responsible for Finance.”
National Bureau of Statistics (NBS) data shows Nigeria imported N24.85 trillion goods from outside Africa in 2022 which, with a 0.5 per cent, would have yielded N124.26 billion revenue to the treasury.
The PUNCH reports the Hong Kong Trade Development Council (HKTDC), in a blog post dated January 3 said: “The import levy aims to lower Nigeria’s public debt, which ballooned from N39.56tn ($88.6bn) in December 2021 to N42.84tn in June 2022.
“While the import levy will boost government revenues, according to some experts it may also raise the costs of imported goods to end consumers, and so add to inflationary pressures which saw the inflation rate grow from 15.60 per cent in January 2022 to 21.47 per cent by November 2022.”
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Another tax burden on businesses, citizens
Centre for the Promotion of Private Enterprise (CPPE) Director Muda Yusuf also argued in a report – titled, “Tweaking the 2023 Finance Bill and Options for Unlocking revenues” – that the tax will be an additional burden on both businesses and citizens, per The PUNCH.
“Most equipment, machinery, ICT equipment, and medical equipment are all imported from outside of Africa. Imposing a levy of 0.5 per cent on this group of items will be inimical to investment, economic growth, and the welfare of the citizens,” Yusuf said.
But Chris Uwadoka, an economist based in Abuja, explained the new tax is a fiscal measure within the government’s capacity, saying since Abuja does not want to fail in its debt obligations, it has to devise measures to meet all obligations.
