FG Targets ₦124.26 billion Annual Revenue From Import Tax

FG Targets ₦124.26 billion Annual Revenue From Import Tax

According to the bill which was introduced under Sector 13 for Customs, Excise, Tariff, etc. (Consolidation) Act and signed into law by ex-President Buhari on May 28, 2023, a 0.5% import tax was imposed on goods imported into Nigeria from outside Africa.

Data from the National Bureau of Statistics (NBS) reveals about ₦24.85 trillion worth of goods were imported from outside Africa in 2022. When a calculation of the 0.5 percent tax is applied to all imports from non-African countries, a revenue of ₦124.26 billion will be realised.

The Finance law read in parts, “In addition to extant customs duties and other approved charges, a levy of 0.5 per cent 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.”

The FG has said its reason for imposing the tax on imported goods is to enable the government to raise revenue to meet its obligations to multilateral organisations like the African Export-Import Bank (Afreximbank) and ECOWAS Bank for Investment and Development (EBID).

The tax also aims to reduce Nigeria’s debt, as the country’s debt profile rose from ₦39.556 trillion in December 2021 to ₦42.84 trillion in June 2022 and currently hovering around ₦46.25 trillion according to the Debt Management Office, (DMO).

This was further confirmed by the Hong Kong Trade Development Council, as it projected that the import levy may help Nigeria lower its public debt profile. The council, however, argued that the tax imposed on imported goods may backfire as it will negatively affect the customers by increasing the cost of goods.