FG Set to Generate Approximately N124.26 Billion from New Import Tax

Recent indications suggest that the Federal Government could potentially generate around N124.26 billion annually from the newly introduced import tax under the Finance Bill 2023.

Former President Muhammadu Buhari signed the Finance Bill 2023 into law on 28 May 2023, which includes a 0.5% import tax on goods imported into Nigeria from outside Africa.

According to the law, a 0.5% levy will be imposed on eligible goods imported into Nigeria from outside Africa to contribute to capital investments, subscriptions, and other financial obligations to institutions such as the African Union, African Development Bank, African Export-Import Bank, ECOWAS Bank for Investment and Development, Islamic Development Bank, United Nations, and other designated multilateral organizations as regulated by the Minister responsible for Finance.

Naija News understands that with the implementation of the new importation tax, the projected additional revenue for the FG is estimated at N124.26 billion. This calculation is based on the fact that Nigeria imported goods worth N24.85 trillion from outside Africa in 2022, and when a 0.5% tax is applied, it translates to the projected amount.

The Federal Government states that this revenue source will assist in meeting its obligations to multilateral organizations and ensure their sustainability.

Reacting to this development, Chris Uwadoka, an economist based in Abuja, commented that the new tax is a fiscal measure well within the government’s capacity. Uwadoka explained that it is a new strategy devised by the government to generate funds for servicing its debt obligations, as failure to do so is not an option.

However, offering a contrasting view, Dr. Muda Yusuf, the Director of the Centre for the Promotion of Private Enterprise, expressed concerns in a report titled ‘Tweaking the 2023 Finance Bill and Options for Unlocking Revenues’ in 2023. He stated that the 0.5% levy on imports from outside Africa would burden both businesses and citizens. Dr. Yusuf highlighted that this would increase operating expenses, production costs, and contribute to inflation in the economy, particularly as many equipment, machinery, ICT equipment, and medical equipment are imported from outside Africa. Imposing a 0.5% levy on these items could be detrimental to investment, economic growth, and the well-being of citizens.

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