Carbonated drinks producers in Nigeria like Coca-cola, Pepsi, Biggi and others may soon face sanctions as the Senate and the Nigerian Customs Service, NCS, have demanded for collection of excise duty from them.
The NCS, specifically asked the federal government to terminate the tax waivers regime granted local companies producing soft drinks in the country.
Comptroller General of Customs, Colonel Hameed Ali (rtd), stated this on Thursday at the Senate joint Committee on Finance, and National Planning on the projection of the 2021-2023 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF/FSP
Ali called on the federal government to broaden its excise tax net to include carbonated drinks in the country.
He said doing so would boost revenue generation since tariff collection on import would drop in 2021 and beyond due to the trade agreement between Nigeria and neighbouring countries.
Specifically, the Custom’s boss wondered why companies like Coca-Cola, Pepsi, Biggi and other non alcoholic beverage firms were not paying taxes in Nigeria when they do in other countries where they have operations.
According to him, 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 nations dwindling revenue.
He said: “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.”
Senate President, Dr. Ahmad Lawan, supported the submissions of Ali and stressed the need for the federal government to immediately review the policy so as not to affect the nation’s economy.
Lawan said: “Collection of excise from Coca Cola and others is in order. This is not going to be an executive function alone.
“The executive and the legislature should work together to identify all firms that really deserve waivers because I don’t understand why Coca-cola for instance should not pay excise.
“It is an established company all over the world and it dominates the soft drinks industry.
“Unless we are turning ourselves to a country of subsidy for international companies, we should look into it.
“Let us also look at what we have lost over the years. While we are not trying to overburden private companies, we should try and see how to make the economy survive.”
The Customs boss has however, assured the Senate that the agency would generate N1.2trillion before the end of the year because it had already collected N830billon as of the end of July this year.
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