The Nigerian Customs Service, NCS, has urged the Federal Government to begin collection of excise duty from carbonated drinks’ producers like Coca-Cola, 7up, and others.
The NCS also urged the Federal Government to terminate the tax waivers regime granted local companies producing soft drinks.
Hameed Ali, the comptroller-general of the NCS stated this on Thursday, August 20, 2020, at the Stakeholders’ Interactive Session on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP) by the Senate Joint Committee on Finance and National Planning.
Ali wondered why companies like Coca Cola, Pepsi Cola, and other non-alcoholic beverage firms were not paying taxes when they do in other countries where they operate.
He noted the defunct Interim National Government of Ernest Shonekan, granted the waivers to the carbonated drinks manufacturers in 1993 to encourage local firms.
He, however, said the policy should no longer be sustained in view of the current reality occasioned by the nation’s dwindling revenues.
Ali said: “We have been pushing for the expansion of our own excise collection. During the Shonekan regime, excise was stopped for carbonated drinks manufacturers like Coca-Cola.
“The only one approved for us are tobacco alcoholic beverages. The understanding then was that tobacco and alcoholic beverages affect the health of citizens and should, therefore, be taxed.
“But we know that carbonated drinks are also injurious to the health of the people due to the high sugar content.
“Therefore if tobacco and alcoholic beverages companies are paying tax, the carbonated drink manufacturers should also pay.
“The collection on import will reduce because of the trade agreement we have signed. So, if we don’t expand our excise, the collection from Customs will drop.”
He called on the Federal Government to extend its excise tax net to include carbonated drinks.
He said the action would boost revenue generation since tariff collection on imports would drop in 2021 and beyond due to trade agreement between Nigeria and neighbouring countries.
Ali however assured the Senate the agency would generate N1.2 trillion before the end of 2020 because it had already collected N830 billion as at the end of July.
Ahmad Lawan, the Senate president, supported the submissions of Ali and emphasised the need for the Federal Government to immediately review the policy so as not to affect the nation’s economy
Lawan said: “The executive and the legislature should work together to identify all firms that really deserve waivers because I don’t understand why Coca-cola for instance should not pay excise.
“It is an established company all over the world and it dominates the soft drinks’ industry.
“Unless we are turning ourselves to a country of subsidy for international companies, we should look into it.
“Let us also look at what we have lost over the years. While we are not trying to overburden private companies, we should try and see how to make the economy survive.”
Source: The Nation
