In a curious manner, the federal government has announced an additional N10 sugar tax on each litre of all non-alcoholic, carbonated and sweetened beverages. The new tax law is contained in the government’s 2021 Finance Act.
According to the Act, the excise duty of N10/litre imposed on all nonalcoholic, carbonated and sweetened beverages was to discourage excessive consumption of sugar in beverages which contributes to diabetes and obesity, among others. Ahmed said the new ‘Sugar Tax’ was introduced to raise excise duties and revenues for health-related and other critical expenditures.
The affected products include Coca-Cola, Pepsi, Sprite and other sweetened beverages that are associated with excess sugar-related illnesses like obesity and diabetes.
According to reports, about four million Nigerians suffer from diabetes linked to excess sugar consumption.
The government considers the new measure as one of its 2022 budget priorities that will help to raise more revenue for health-related and other critical expenditures.
“The 2022 budget seeks to continue the reflationary policies of the 2020 and 2021 Budgets, which helped put the economy back on the path of recovery and growth,” minister of Finance, Budget and National Planning, Zainab Ahmed said yesterday during a breakdown of the 2022 budget in Abuja.
On his part, the director-general of the Budget Office of the Federation, Ben Akabueze, said the budget is a reflection of what and whom the government is concerned about. He made the comment in a welcome remark to begin the event.
Also, in an ambitious stance to put its revenue generating agencies on their toes, the federal government has unveiled an income target for the agencies to raise revenue for the financing of its 2022 budget.
In all, the government hopes to generate N10.74 trillion from government-owned agencies, including share of oil revenue, dividend, share of minerals and mining, non-oil taxes, independent revenue and domestic recoveries.
Ahmed said the projected aggregate revenue available to fund the 2022 budget of N10.74 trillion (inclusive of GOEs) is 32 percent higher than the 2021 projection of N8.12 trillion. Without the GOEs retained revenue, the federal government revenue is projected at N9.01 trillion.
To promote fiscal transparency, accountability & comprehensiveness, allocations to TETFUND and the budgets of 63 GOEs are integrated in the FGN’s 2022 Budget proposal. In aggregate, 35 percent of projected revenues is to come from oil-related sources while 65% is to be earned from non-oil sources.
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Begins repayment Of IMF loan in June
In another development, the federal government said it will commence repayment of $3.4bn Rapid Credit Facility to the International Monetary Fund (IMF) from June this year. The loan facility has a quarterly repayment plan.
The minister also disclosed that the federal government surpassed its N1.061 trillion target for independent revenue to generate N1.103 trillion in 2021.
The $3.4bn Rapid Credit Facility was obtained by the federal government from the IMF in 2020 during the period when the Coronavirus pandemic led to a shutdown of the Nigerian economy
The IMF used the instrument as a concessional financial assistance to countries that were facing urgent financial need.
Read the original article on Leadership.
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