The Finance Bill 2023 which was signed into law on 28 May
2023 by former President, Muhammadu Buhari imposed a 0.5 per cent levy on goods
imported into Nigeria from outside Africa.
According to the law, a 0.5 per cent levy will be imposed on
goods imported into Nigeria from outside Africa. It read in parts, “In addition
to extant customs duties and other approved charges, a levy of 0.5 per cent is
imposed on all eligible goods imported into Nigeria from outside Africa to
finance capital contribution, subscriptions, and other financial obligations to
the African Union, African Development Bank, African Export-Import Bank, ECOWAS
Bank for Investment and Development, Islamic Development Bank, United Nations,
and other multilateral institutions as may be designated by regulation issued
by the Minister responsible for Finance.”
Nigeria imported N24.85tn worth of goods from outside Africa
in 2022 according to data from the National Bureau of Statistics. When a base
tax of 0.5 per cent was applied to total non-African imports, it translated to
N124.26bn. It remains to be seen if the 0.5 per cent import tax will be added
to all goods.
According to the Federal Government, this revenue source
will help it meet and ensure the sustainability of its obligations to
multilateral organisations.
The Hong Kong Trade Development Council, in a blog post
dated January 3, 2023, stated that the import levy may help Nigeria lower its
public debt profile. It also noted that customers might be at the receiving end
of the policy, with the cost of imported goods rising.
It said, “The import levy aims to lower Nigeria’s public
debt, which ballooned from N39.56tn ($88.6bn) in December 2021 to N42.84tn in
June 2022.
“While the import levy will boost government revenues,
according to some experts it may also raise the costs of imported goods to end
consumers, and so add to inflationary pressures which saw the inflation rate
grow from 15.60 per cent in January 2022 to 21.47 per cent by November 2022.”
In a report titled, ‘Tweaking the 2023 Finance Bill and
Options for Unlocking revenues’ in 2023, the Director of the Centre for the
Promotion of Private Enterprise, Dr Muda Yusuf, argued that the 0.5 per cent
levy on all imports coming from outside of Africa will be an additional burden
on both businesses and the citizens.
He stated that this will escalate operating expenses,
production costs, and fuel inflation in the economy. He said, “Most equipment,
machinery, ICT equipment, and medical equipment are all imported from outside
of Africa. Imposing a levy of 0.5 per cent on this group of items will be
inimical to investment, economic growth, and the welfare of the citizens.”
According to an Abuja-based economist, Chris Uwadoka, who
spoke with The PUNCH earlier, the new tax is a fiscal measure within the
government’s capacity.
He noted that since the government does not want to fail
with its debt obligations, it had to devise measures to ensure it meets all its
obligations.