The Federal Government of Nigeria have put up considerations to place tax on locally made drinks such as Coca Cola, Pepsi, Biggi amongst many other soft drinks.
This was disclosed by the Minister of Finance, Zainab Ahmed, while addressing newsmen on the outcome of the ongoing annual meetings bwtween the International Monetary Fund and World Bank Group, according to the Cable.
The Minister said that the reason for the proposal was as a result of the government’s efforts to explore new revenue streams for the country, while also maximising existing ones.
She was quoted to have said;
“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,” she said.
“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.”
Ahmed described the fact that the country’s budget is funded mainly by oil as an anomaly. Accordingto her, budgets should be largely funded by various streams of revenue.
In her words;
“The budget of countries is supposed to be based on taxes that the country is able to generate. It is an anomaly for us in Nigeria that our budgets have not been focusing on revenue,” she said.
READ ALSO: Lagos To Acquire 32,000 Hectares Farmland for Rice Cultivation
“We can only develop in a manner that is sustainable when we are using tax revenues to fund our national and sub-national budgets. It is an anomaly that we are depending largely on oil and gas revenue, which is a resource that is finite. It is going to go out of existence before you know it. So we have to develop the domestic tax base. The main focus will be on expanding the tax base ensuring enforcement of the existing laws and then blocking leakages.
“What we are trying to do in 2020 is to harness the full potential of revenue mobilisation. The only increase in taxes in 2020 budget is just VAT. Everything else is just maximizing the potentials of existing tax streams that we have and we hope that we will be able to do this to be able to move our tax to GDP ratio from the current seven to eight per cent of GDP to 15 per cent.”