SAN FRANCISCO, November 26, (THEWILL) – The Federal Government has revealed its plan to impose special taxes on luxury products including luxury cars and alcohol.
The special taxes are designed to raise more revenue from the non-oil sector to generate additional N1 trillion to cushion the deficit in the 2018 budget.
The government is hoping to make N2.5b from the special taxes on insurance of luxury cars and surcharge on other luxury goods as N350b is expected as additional Company Income Taxes from the Voluntary Assets and Income Declaration Scheme (VAIDS).
The Minister of State for Budget and National Planning, Hajia Zainab Ahmad, unveiled the plan when she presented the revised MTEF and FSP to the Senate Joint Committee on MTEF.
She reported that the Federal Executive Council (FEC) in August 2017 approved the 2018-2020 MTEF/FSP which had been presented to the National Assembly for approval.
“When the FEC approved the MTEF/FSP, it constituted a committee chaired by the Minister of Finance which was tasked with identifying additional sources of about N1 trillion revenue to cut the 2018 budget deficit and new borrowings,” she stated.
“This includes N710 billion to be generated from the restructuring of government’s equity in all the Joint Venture oil assets; and N320 billion additional revenues from revision of terms to improve government take in the production sharing contracts.
The government is also expecting “additional N60 billion from excise duties on cigarettes and alcohol while it is also reviewing the tax profiles of companies that received major payments from it in the last five years.
