In a bid to reduce diabetes, the Federal Government has introduced excise duty on soda.
The President Muhammadu Buhari-led administration introduced N10 excise duty on each litre of sweetened beverages and carbonated drinks.
The Minister of Finance, Budget and National Planning, Zainab Ahmed gave health reasons as the cause for the newly-introduced tax.
Ahmed said the tax would also support revenues for health-related and critical expenditures.
Speaking during the public presentation of the 2022 budget, she said this new policy is in the Finance act signed into law.
This was signed by President Muhammadu Buhari on December 31, 2021.
“There’s now an excise duty of N10 per litre imposed on all non-alcoholic and sweetened beverages.
“This is to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions including diabetes and obesity.
“But it is also used to raise excise duties and revenues for health-related and other critical expenditures. This is in line also with the 2022 budget priorities.”
She announced the introduction of law requiring foreign companies to remit Value Added Tax to the Federal Inland Revenue Service.
These foreign companies are those providing digital services in the country.
The finance minister said this new policy is also found in Section 30 of the Finance Act.
The act amended the provisions of Sections 10, 31 and 14 on VAT obligation of non-resident digital firms.
“Section 30 of the Finance Act is designed to amend Section 10, 31 and 14 of VAT. This is in relation to VAT obligations for non-resident digital companies and the mechanism that will be used is to restrict VAT obligations mainly to digital non-resident companies who supply individuals in Nigeria who can’t themselves self-account for VAT.
“So, if you visit Amazon, we are expecting Amazon to add VAT charge to whatever transaction you are paying for.
“I am using Amazon as an example.
“We are going to be working with Amazon to be agreed to be registered as a tax agent for the FIRS.
“So Amazon will now collect this payment and remit to FIRS and this is in line with global best practices, we have been missing out on this stream of revenue.”
What is excise duty?
This is a tax levied on the manufacture of goods and services within the country.
Source: PUNCH HealthWise