Economy
Soft Drinks Makers in Nigeria May Begin to Pay Excise Duty
By Modupe Gbadeyanka
Makers of carbonated (soft) drinks in Nigeria may begin to pay excise duty to the federal government just like their counterpart in the alcohol business.
The Nigerian government said it was irrational for those in the beer, spirit and tobacco industry to pay tax, while those in the soft drink business do not.
In the past, makers of carbonated drinks paid excise duty to the government until the interim national government (ING) of Mr Ernest Shonekan abolished it in 1993.
But the Comptroller-General of the Nigeria Customs Service (NCS), Mr Hameed Ali, wants this policy reversed, stating that the reason for exempting soft drinks makers was no longer valid.
According to the retired military officer, producers of tobacco and alcoholic beverages were not exempted from excise duty payment in Nigeria because their products were believed to be dangerous to the health of consumers.
Mr Ali, while appearing before a joint committee of the Senate on Finance and National Planning on Thursday in Abuja, argued that the consumption of soft drinks has also been proven to be dangerous to health, especially because of its sugar content.
He, therefore, called on the government to start subjecting manufacturers of carbonated drinks in the country to the payment of excise duty.
He warned that if this issue is not looked into, Nigeria may suffer a huge decline in revenue because a number of agreements signed by Nigeria, especially the African Continental Free Trade Area (AfCFTA), are likely to reduce revenue from import.
“We have asked for the expansion of our own excise collection.
“During the [Ernest] Shonekan regime [in 1993], the excise was stopped for carbonated drinks manufacturers, like Coca-Cola.
“We are only allowed to collect excise duty [on] tobacco and alcoholic beverages.
“The understanding then was that tobacco and alcoholic beverages affect the health of citizens and should be taxed.
“But we know that carbonated drinks are also injurious to the health of the people due to the high sugar content.
“Therefore, if tobacco and alcoholic beverages companies are paying tax, the carbonated drink manufacturers should also pay,” the customs boss said.
Business Post reports that since the federal government increased the excise duty on tobacco and alcoholic beverages, manufacturers have struggled to make profit from the business.
Also, the declining purchasing power of consumers in the country has made it very difficult for beer makers to increase the prices of their products.
Soft drinks are consumed by a large number of people in the country, especially among Christians and Muslims, whose faiths kick against the consumption of alcohol.
This is not the first time the federal government is considering collecting more taxes from soft drink makers in the country.
In 2019, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, said the government was looking at charging producers of carbonated drinks for sugar tax so as to increase the nation’s revenue streams.
“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,” Mrs Ahmed had said last year on the sidelines of the annual meetings of the International Monetary Fund and the World Bank in the United States.
By Adedapo Adesanya
The federal government is offering two new savings bonds with interest rates between 17 and 18 per cent through the Debt Management Office (DMO).
In a statement by the agency, the country said retail investors can purchase the two-year bond maturing in January 2027 at 17.23 per cent interest, while the three-year paper maturing in January 2028 at a coupon rate of 18.23 per cent.
Bonds are very safe financial instrument that serve as investments because they are backed by the federal government, which promises to pay back the money.
According to the DMO, people can buy these bonds starting January 13, 2025, until January 17, 2025, with allotment expected on January 22, 2025, and the interest to be paid to investors every three months – in April, July, October, and January.
These bonds have some special features. They are tax-free under both company and personal tax laws.
Big investors like pension funds and trustees are allowed to buy them and each bond costs N1,000 each.
However, interested investor can only buy at least N5,000 worth, and can’t buy more than N50 million.
This comes after the Ms Patience Oniha-led debt office said the Nigerian government was offering three bonds worth N150 billion in September 2024.
By Aduragbemi Omiyale
The House of Representatives has said it would make efforts to pass the controversial tax reform bills forwarded to the National Assembly by President Bola Tinubu last year.
Mr Tinubu, in a bid to improve revenue of the government, asked the parliament to pass the bills, but this has been resisted mostly by northern lawmakers and others.
At the resumption of plenary session on Tuesday in Abuja, the Speaker of the House of Representatives, Mr Abbas Tajudeen, assured that the green chamber of the legislative arm of government would prioritise the tax reform bills.
“The legislative agenda of the House for 2025 prioritises the passage of the Appropriation Bill and the Tax Reform Bills, both of which are pivotal to economic recovery and fiscal stability.
“These reforms are essential for broadening the tax base, improving compliance and reducing dependency on external borrowing.
“The House will ensure that these reforms are equitable and considerate of the needs of all Nigerians, particularly the most vulnerable,” Mr Abbas said through the Deputy Speaker, Mr Ben Kalu, who presided over the session.
He also expressed grief over the loss of lives in stampedes in Ibadan, Abuja and Anambra State last month due to hardship in the country.
Several Nigerians died in the stampedes while trying to receive palliatives given to alleviate their sufferings.
“Tragic events, such as the stampedes in Ibadan, Abuja and Okija, during the distribution of palliative aid, underline the urgent need for improved planning and safety protocols in humanitarian efforts. On behalf of the House, I extend our deepest sympathies to the families and communities affected.
“These incidents serve as a stark reminder of the socio-economic hardships facing our citizens and the imperative for policies that tackle hunger and poverty at their roots.
“Turning to the economy, 2024 presented both difficulties and opportunities. While inflation remains a pressing concern, progress in GDP growth and the positive trajectory of economic reforms provide hope for a more stable and prosperous 2025,” the Speaker said.
By Adedapo Adesanya
The NASD Over-the-Counter (OTC) Securities Exchange recorded a 0.69 per cent appreciation on Monday, January 13, as investors showed renewed interests in unlisted securities.
During the trading session, the NASD Unlisted Security Index (NSI) increased by 21.07 points to wrap the session at 3,095.00 points compared with the 3,073.93 points recorded in the previous session.
In the same vein, the value of the local alternative stock exchange went up by N7.22 billion to close at N1.061 trillion compared with last Friday’s N1.051 trillion.
Yesterday, FrieslandCampina Wamco Nigeria Plc recorded a growth of N3.78 to close at N42.00 per share versus N38.22 per share, Mixta Real Estate Plc improved by 20 Kobo to end at N2.35 per unit versus the preceding closing rate of N2.15 per unit, and Industrial and General Insurance (IGI) Plc gained 1 Kobo to finish at 25 Kobo per share compared with the previous session’s 24 Kobo per share.
Conversely, Geo-Fluids Plc lost 29 Kobo to quote at N4.56 per unit compared with the preceding day’s N4.85 per unit, and Afriland Properties Plc slid by 75 kobo to end the session at N15.50 per share versus the preceding closing rate of N16.25 per share.
During the session, the volume of securities traded decreased by 27.2 per cent to 3.1 million units from 4.3 million units, the value of securities slumped by 81.5 per cent to N3.2 million from N17.2 million, and the number of deals expanded by 57.9 per cent to 30 deals from 19 deals.
At the close of trades, FrieslandCampina Wamco Nigeria Plc remained the most active stock by value (year-to-date) with 1.9 million units worth N74.2 million, followed by 11 Plc with 12,963 units valued at N3.2 million, and IGI Plc with 10.7 million units sold for N2.1 million.
Also, IGI Plc remained the most traded stock by volume (year-to-date) with 10.6 million units sold for N2.1 million, trailed by FrieslandCampina Wamco Nigeria Plc with 1.9 million units valued at N74.2 million, and Acorn Petroleum Plc with 1.2 million units worth N1.9 million.
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