NBC, Rite Foods, others to pay new tax as FG identifies new revenue streams

The Nigerian Bottling Company (NBC), Rite Foods Plc and other manufacturers of carbonated drinks may have to start paying excise duties as the Federal Government identifies new streams of revenue to help boost its revenue base.

This was announced by the Minister of Finance, Budget and National Planning, Zainab Ahmed on the sidelines of the World Bank/International Monetary Fund meetings holding in Washington DC, United States.

Ahmed made it known that since the Value Added Tax increase had been proposed, other streams of revenue the government was considering include the introduction of excise duties on carbonated drinks.

Carbonated drinks include soft drinks like Coca Cola, Fanta, Bigi and excise duties are taxes levied on locally produced goods. Nairametrics understands that currently, excise is placed on non-alcoholic beverages, fruit juices, beer, stout and alcoholic beverages as shown on the website of the Nigeria Customs Service.

excise duties

Speaking further, Ahmed stressed the importance of taxes and the plans of the government in ensuring citizens pay tax.

“There is also a proposal to build tax rates for SMEs. We also increase the minimum tax level to make it easy for people to plan their taxes. Nigeria, we don’t have adequate social contract. The government was not asking for or enforcing tax collection and, therefore, taxpayers also were not taking up their civic responsibilities. This is because we are largely dependent on oil revenue and people are not used to paying taxes.

“Very recently at the Nigeria economic summit, they shared a citizens survey and 75% of people that was surveyed said ‘we don’t think there is anything wrong in not paying taxes and it is not a problem’ and there was a few that said ‘I don’t see what the taxes are used for. So, why should I pay tax’?

We have a very low tax morale. We are planning a strong strategic communications process to educate people on why they need to pay taxes. Because we rely heavily on oil and it is not going to be there forever. So, we have to boost domestic revenue generation and use tax revenue to develop their economies and Nigeria should not be an exception.

“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.

“The fact that our revenue is underperforming is not an excuse to bring down our revenue that is required to fund the national budget.”

Source: Nairametrics
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