Carbonated drinks also known as sof drinks in Nigeria including Coke, Pepsi, Bigi, and RC might be facing new tax in Nigeria.
The Nigerian finance minister, Zainab Ahmed, recently revealed that the federal government is considering introducing excise duty on carbonated drinks.
Ahmed made this known to the public on the sidelines of the 2019 International Monetary Fund and World Bank Group meetings.
The minister further said the move is being considered by the government in other to maximise existing revenue streams while trying to identify new revenue streams.
In her words, “Our objective is to be able to harness the existing revenue streams that we have by ensuring that enforcement is effective to expand the tax base and also to identify new revenue streams that we can add to expand the revenue base.
“So in expanding the revenue base, we have proposed the increase of VAT but there are also other revenue streams that we are looking at and some of them include the introduction of excise duties on carbonated drinks but there is a process to doing these things.
“Any tax that you are introducing will involve a lot of consultations and also amendments of some laws or introduction of new regulations.
“There are several cost-cutting measures also in the Strategic Revenue Growth Initiative (SRGI) and also a number of cost-cutting initiatives such as innovation and automation as well as capacity building of our people.”
What is Excise Tax?
An excise or excise tax is any duty on manufactured goods which is levied at the moment of manufacture, rather than at sale. Excises are often associated with customs duties (which are levied on pre-existing goods when they cross a designated border in a specific direction); customs are levied on goods which come into existence – as taxable items – at the border, while excise is levied on goods which came into existence inland (manufactured locally).