WTO, AfCFTA Treaties Will Shrink Nigeria’s Revenue—Customs

By Adedapo Adesanya

The Nigerian Customs Service (NCS) has complained that trade treaties that Nigeria are signed to such as the World Trade Organisation (WTO) and the African Continental Free Trade Area (AfCFTA) agreement will seriously impact on the ability of the country to generate revenue.

This assertion was made by the Comptroller General of the service, Mr Hameed Ali, on Thursday during an interactive session organized by the Senate joint committees in finance and national planning on the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF/FSP).

He said the two agreements have provisions that will allow goods to come into Nigeria at zero tariffs, making it difficult to drive revenue generation that the country will need as it faces the aftermath of the coronavirus pandemic.

As a revenue-generating agency, Mr Ali noted that despite the disruptions brought about by the current crisis, the customs service has generated N837 billion as of July 2020, which is 50 per cent of its N1.68 trillion target for the year.

He added that the Service is projecting total revenue of N1.465 trillion for 2021, N1.704 trillion for 2022, and N1.758 trillion for 2023.

During the Senate session, the Comptroller General also said he is not in support of a policy arrangement which makes it possible for Coca-Cola to continue to produce in Nigeria without paying anything to the Nigerian government.

The Customs CG wondered why companies such as Coca Cola, Pepsi Cola and other non-alcoholic beverage firms were not paying taxes in Nigeria when they do in other countries where they have operations.

He noted that the defunct Interim National Government of Ernest Shonekan, granted the waivers to the carbonated drinks manufacturers in 1993 to encourage local firms.

He, however, said the policy should no longer be sustained in view of the current reality occasioned by the nation’s dwindling revenue.

“We have been pushing for the expansion of our own excise collection. During the Shonekan regime, excise was stopped for carbonated drinks manufacturers like Coca-Cola.

“The only one approved for us are tobacco alcoholic beverages. The understanding then was that tobacco and alcoholic beverages affect the health of citizens and should, therefore, 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 collection on import will reduce because of the trade agreement we have signed. So, if we don’t expand our excise, the collection from Customs will drop.”

He called on the federal government to extend its excise tax net to include carbonated drinks.

Reacting to this Senate President, Mr Ahmed Lawan said the agreement with Coca Cola is a misnomer as Coca Cola is an international brand and a dominant player in the beverage industry.