Reps Amends Finance Act, Includes Levies on Non-Alcoholic Drinks

The House of Representatives Committee on Finance has resolved that it will amend the Finance Act to include levies on all carbonated and non-carbonated drinks.

The Committee made the resolution on Monday at the interactive session on the 2022-2024 Medium-Term Expenditure Framework (MTEF), holding at the National Assembly, Abuja.

This followed the plea by the Comptroller-General of Nigerian Customs Services, Hameed Ali, that all beverages companies should be made to pay levies.

Mr. Ali, while responding to a question of levy on non-alcoholic drinks, said he had been advocating that non-alcoholic drinks be re-excised.

According to him, non-alcoholic drinks are as harmful as alcoholic beverages, noting that there is a 30 percent excise levy on alcoholic drinks.

“On several cases, I have made submissions. My chairman (Leke Abejide, the Chairman House Committee on Customs & Excise Duties) is aware that I have been on this battle that we should re-excise the companies that were de-excised in 2019.

“What we have been fighting for is that if alcohol beverages and tobacco are injurious to our health and that is why the government decided to tax them, the carbonated drinks are equally injurious to our health and they should be taxed.

“I have sung this song for many years now, Coca-Cola is producing in this country and it is not being taxed. There is nowhere you go in the world that Coca-Cola is not paying tax to its host country, but Coca-Cola in this country is not paying anything because of the government’s unwillingness to re-excise those companies. For us, we have been battling for it, and I hope that one day, we will start collecting,” Mr. Ali said.

Responding to the demand of Mr. Ali, the Chairman of the House Committee on Finance, James Faleke, said the committee will consider amending the Finance Act along the line of argument of the Customs CG.

“We will be considering……..I am sure that the federal government will be coming up with the 2022 Finance Bill. There is a need for us to look at the possibility of charging excise duty on all drinks manufactured in this country, this is on all drinks, carbonated and non-carbonated.

“Carbonated is already part of the Finance Act, but companies cannot be operating and making huge profits. We are talking about excise….I am sure they are paying their income tax, but in terms of production tax…..even non-alcoholic are injurious, if you drink too much it is a wahala (problem). You will just be consuming sugar,” he said.

Also making a case for the levy on beverages, Mr. Abejide said the government needs to commence the implementation of the carbonated drinks levy.

He said the full implementation of the law would increase the revenue generation of Customs.

“Customs is doing well, and I am happy. This Finance Act that we passed in 2020, we should try and start making it work for carbonated drinks. It is already there as a law. Customs should partner with the ministry of finance so that they will get the approval in order for them to start collecting so that they can act and start collecting, If we implement that Act, it will be very easy to collect. Even if it is not up to N2.5 trillion, at least they can cross it,” Mr. Abejide said.

The Customs CG also blamed the lack of scanners at major ports for the smuggling of goods. According to him, agents connive with importers to devalue goods to reduce the percentage of duties.

“To be frank, apart from vehicle smuggling, most of the smuggling —evasion of duties — happens at the port because we do not have scanners and which means we cannot inspect every container and know the content,” Mr. Ali said.

“With due respect to stakeholders, most of our traders in conjunction with clearing agents always try to devalue the goods that are imported and therefore reducing the percentage. But if we have scanners…. I thank God very soon we will be deploying three major scanners at the major ports. That will help us tremendously to be able to reduce to the barest minimum the extent of smuggling. Because you have a company bringing 50 containers, you hardly can inspect all those and also we are mindful of the ease of doing business.

“Mr chairman, I assure you that now that the scanners are almost at our shores, once we deploy them I believe that we will realise the increment in terms of revenue.”