FG To Rake In About N124.26 Billion From New Import Tax

Indications are that the Federal Government might be making about N124.26 billion annually from the new import tax introduced in Finance Bill 2023.

Recall that former President Muhammadu Buhari, as part of his last-minute moves signed into law on 28 May 2023 the Finance Bill 2023, which imposes a 0.5% import tax on goods imported into Nigeria from outside Africa.

According to the law, a 0.5% cent levy will be imposed on goods imported into Nigeria from outside Africa. It read in parts, “In addition to extant customs duties and other approved charges, a levy of 0.5% is imposed on all eligible goods imported into Nigeria from outside Africa to finance capital contribution, subscriptions, and other financial obligations to the African Union, African Development Bank, African Export-Import Bank, ECOWAS Bank for Investment and Development, Islamic Development Bank, United Nations, and other multilateral institutions as may be designated by regulation issued by the Minister responsible for Finance.”

Naija News understands that with the new importation tax, the forecast is the FG might be eying N124.26 additional revenue because according to the National Bureau of Statistics (NBS), Nigeria imported N24.85 trillion worth of goods from outside Africa in 2022.

Going by this calculation, when a base tax of 0.5% was applied to total non-African imports, it translated to N124.26 billion.

According to the Federal Government, this revenue source will help it meet and ensure the sustainability of its obligations to multilateral organisations.

Reacting to the development, an Abuja-based economist, Chris Uwadoka, told The Punch that the new tax is a fiscal measure within the government’s capacity.

Uwadoka explained that it was a new measure devised by the government to raise funds to service its debt obligations since they don’t want to fail.

However, expressing a contrary opinion, the Director of the Centre for the Promotion of Private Enterprise, Dr Muda Yusuf in a report titled ‘Tweaking the 2023 Finance Bill and Options for Unlocking Revenues’ in 2023, said the 0.5% levy on all imports coming from outside of Africa will be an additional burden on both businesses and the citizens.

He stated that this will escalate operating expenses, production costs, and fuel inflation in the economy, noting that  “Most equipment, machinery, ICT equipment, and medical equipment are all imported from outside of Africa. Imposing a levy of 0.5 per cent on this group of items will be inimical to investment, economic growth, and the welfare of the citizens.”