Federal Government of Nigeria to Introduce More Sin Taxes in 2023
- The Federal Government of Nigeria has disclosed plans to introduce and implement more sin taxes in 2023
- The implementation of sin taxes would fund critical projects and infrastructures in the country
- The introduction of new taxes has been condemned by many who feel the system is already overburdened by excessive and multiple taxations
The Federal Government of Nigeria has disclosed plans to introduce more sin taxes next year, 2023, through the proposed Finance Bill 2022. The plan also includes a cut down on tax incentives.
According to Punch, the new information is contained in a document of the public presentation of the 2023 proposed budget by the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed.
The minister revealed in the presentation that sin taxes would be introduced to fund critical projects and infrastructures in the country.
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What are Sin Taxes?
Sin taxes are taxes placed on the sale of certain products deemed to be harmful to individuals and society at large. The products include tobacco, cigarettes, alcohol, soft drinks, sugar, and lotteries amongst others.
The reason for the increasing sin taxes is usually to raise the prices of the products or services in order to lower their demand. The government on the other hand, also apply it when in need of new sources of revenue.
FG introducing new taxes to raise revenue
It would be recalled that earlier this year, the Minister of Finance, Zainab Ahmed announced during a public presentation of and breakdown of the 2022 budget in Abuja, the introduction and implementation of excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages in the country.
Ahmed said that the move was part of a new policy introduced in the Finance Act which was signed into law by President Muhammadu Buhari on December 31, 2021, alongside the 2022 Appropriation Bill.
The new tax has however been condemned by many experts, including Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader, PwC, who declared that it would lead to an increase in the retail cost of beverages by 5%.
A few months ago, Ahmed again disclosed that the Federal Government intends to implement a 5% inclusive excise duty on telecommunications services in Nigeria. The plan was later suspended after a series of protests from several quarters including the Minister of Communications and Digital Economy, Prof. Isa Pantami who insisted that the telecommunications sector was already overburdened by excessive and multiple taxations.
FG to cut down on tax incentives
Aside from introducing six taxes, the Federal Government plans to phase out tax incentives, such as the pioneer tax waiver.
Apart from the introduction of sin taxes, the government also plans to plans to get rid of tax incentives such as pioneer tax waiver.
It would be recalled that the Federal Government gave tax reliefs and concessions worth trillions of nairas to scores of companies including Dangote, Globacom, MTN Nigeria and the Nigerian National Petroleum Company Limited.
Source: Legit.ng
