Nigerians will pay more as the Federal Government imposes new taxes on beer, imported vehicles, plastics, and other items.

With less than a month left in President Muhammadu Buhari’s administration, the Federal Government has imposed new taxes on alcoholic beverages, imported vehicles, and single-use plastics, according to reports.

This disclosure is contained in the new Fiscal Policy Measures (FPM) for 2023, which are contained in a Circular dated April 20, 2023, and signed by Zainab Ahmed, Minister of Finance, Budget, and National Planning.

Mr. Taiwo Oyedele of PricewaterhouseCoopers revealed details of the new tax regime in the new Fiscal Policy Measures (FPM) documents approved by President Muhammadu Buhari on his official Twitter account.

The Federal Government will now charge N75 per litre of imported beer or stout. In 2023, N75 per litre will be charged on “beer and stout including all alcoholic beverages and beer not made from malt- whether fermented or not fermented,” according to Finance Minister Zainab Ahmed. In 2024, the new excise duty on beer and stout will be increased to N100 per litre.

Prior to the new rates, the government taxed imported alcoholic beverages using valorem rates (levying tax or customs duties in proportion to the estimated value of the goods or transaction in question). There is now a fixed rate rather than an estimate.

The same excise rate that applies to beer will be applied to wine imports. With effect from 1 June 2023, vehicles with two litre engines will be subject to a two percent Import Adjustment Tax (IAT), while vehicles with four litre engines and above will be subject to a four percent IAT.

The Federal Ministry of Finance Budget and National Planning quietly issued a circular (HMFBNP/MDAs/circular/2023FP/04) to all Ministries, Departments and Agencies on April 20, 2023 informing them of the new developments.

The Federal Government has also added to the list of items banned from being imported into the country.

The Federal Government has revised the import prohibition list with the inclusion of used motor vehicles above 12 years from the Year of manufacture; Paracetamol tablets Syrups; Cotrimozazole tablets and Syrups; Metronidazole tablets and Syrups and Chloroquine tablets and Syrups.

Also included on the list are Folic acid tablets; Vitamin B Complex tablets (except modified release formulations); Multivitamin tablets, capsules and syrups (except special formulations); Aspirin tablets (except modified release formulations and soluble aspirin).

Others are: Magnesium trisilicate tablets and suspensions; Piperazine tablets and syrups; Levamisole tablets and syrups; Ointments penicillin/gentamycin; Pyrantel pamoate tablets and syrups; Intravenous Fluids (Dextrose, Normal Saline etc); Waste pharmaceutiques; and Mineral or chemical fertilisers containing the three fertilising elements nitrogen, phosphorus and potassium (NPK)

The Federal Government also introduced a Green Tax by way of excise duty on Single Use Plastics (SUPs) including plastic containers, films and bags at the rate of 10 percent.

An Import Adjustment Tax (IAT) levy has been introduced on motor vehicles of 2000 cc to 3999 cc at 2 percent while 4000 cc and above will be taxed at 4 percent.

With effect from 1st June, 2023, “vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempted”.

Under the Supplementary Protection Measures (SPM) as it relates to the implementation of the ECOWAS Common External Tariff 2022-2026, the circular stated that the changes are effective from 1 May 2023 subject to 90-days grace period for importers who had opened Form M before 1 May 2023.

Items on the list include rice, woven fabrics, ceramics tiles and sinks, steel, containers for compressed or liquified gas, aluminum cans, washing machines, electric generating sets and rotary converters, smart phones, new and used passenger motor vehicles and electricity meters. The applicable duties for most of the items are unchanged from the 2022 FPM rates.

In addition, following the imposition of a 5% excise duty on telecommunication services introduced by the Finance Act 2020 and prescribed in the Official Gazette No. 88, Vol. 109 of 11 May 2022 approved by the President, a 5% tax will be levied on mobile telephone services (GSM), fixed telephone services, and internet services (both postpaid and prepaid).

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