The new tax law captured in the 2023 Fiscal Policy measures and was recently introduced by the federal government, has been described as capable of ‘worsening the economic woes of helpless Nigerians who have to contend with dwindling purchasing power.
The document signed by, the minister of Finance, Budget and National Planning, Zainab Ahmed, proposed additional excise taxes ranging from 20% to 100 per cent increases on previously approved rates for alcoholic beverages, tobacco, wines and spirits have been introduced effective from 1 June 2023.
However, the excise duty rate on non-alcoholic beverages is retained at the rate of N10 per litre.
Other taxes include; excise duty on Single Use Plastics (SUPs) including plastic containers, films and bags at the rate of 10%, an Import Adjustment Tax (IAT) levy on motor vehicles of 2000 cc to 3999 cc at two per cent while 4000 cc and above will be taxed at four per cent. Vehicles below 2000 cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempted.
Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele, explained that, the tax increase captured in the 2023 Fiscal Policy will weigh negatively on the economy as it will further put upward pressure on inflation.