FG imposes N10 per liter tax on carbonated drinks, to control diabetes, obesity, and other diseases

Nigeria’s Federal Government has introduced an excise duty of N10 per litre on all non-alcoholic, carbonated and sweetened beverages.

She argued that N10 tax per litre of soda drinks was to “discourage excessive consumption of sugar in beverages, which contributed to diabetes, obesity and other diseases.”

Excise duty is a form of tax imposed on the production, licensing and sale of goods.

Mrs. Ahmed said the new policy introduced is in the Finance Act signed into law by President Muhammadu Buhari on December 31, 2021.

“There’s now an excise duty of N10 per litre imposed on all non-alcoholic and sweetened beverages. And this is to discourage excessive consumption of sugar in beverages which contributes to a number of health conditions including diabetes, obesity and other diseases. But it is also used to raise excise duties and revenues for health-related and other critical expenditures. This is in line also with the 2022 budget priorities.”

She also said the government had introduced a law requiring foreign companies providing digital services in the country to collect and remit Value Added Tax to the Federal Inland Revenue Service.

According to her, the new policy is also contained in Section 30 of the Finance Act which amended the provisions of Section 10, 31 and 14 on VAT obligations for non-resident digital companies.

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“Section 30 of the Finance Act is designed to amend Section 10, 31 and 14 of VAT is in relations to VAT obligations for non-resident digital companies and the mechanism that will be used is to restrict VAT obligations mainly to digital non-resident companies who supply individuals in Nigeria who can’t themselves self-account for VAT,” the minister said.

“So if you visit Amazon, we are expecting Amazon to add VAT charge to whatever transaction you are paying for. I am using Amazon as an example. We are going to be working with Amazon to be agreed to be registered as a tax agent for the FIRS.

“So Amazon will now collect this payment and remit to FIRS and this is in line with global best practices, we have been missing out on this stream of revenue.

The noted that the new law applies to foreign companies that provide digital services such as, “apps, high frequency trading, electronic data storage, online advertising” among others.