… forecasts an increase in illegal imports
Clearing agents and the Nigerian Employers Advisory Association, which operate in the country’s seaports, have criticized the federal government’s tax on businesses, saying the situation would have a negative impact on the country.
They also predicted that illegal imports in Nigeria could increase due to the government’s new food and beverage tax.
They argue that taxes could affect the price of goods and make life difficult for citizens.
The Federal Treasury’s Technical Committee on Tariffs recently announced steep taxes on tobacco, wine, spirits and sugar-sweetened non-alcoholic beverages.
In response, Mr. Wale Oyerinde, Director General of NECA, said in a recent stakeholder engagement that the result of the sharp increase as expected is that illegal players will lose significant transaction volumes, which will ultimately harm the government’s interests. income.
He further explained that if the excise tax burden is passed on to consumers, thereby making cigarette prices significantly higher than in neighboring countries, consumer preference will shift from the taxed market to an alternative market that is not taxed or even taxed. Smuggled products.
According to him, “Nigeria may become a more attractive destination for illicit trade as neighbouring countries such as Togo and Benin cut their excise tax rates (ad valorem) to 50% from 150% and 100% respectively earlier this year Given the situation at Nigeria’s border, limited enforcement resources and associated challenges, the government does not have the tools or resources to address the challenges of illicit trade.”
Meanwhile, Kayode Farinto, national acting president of the Association of Chartered Customs Agents of Nigeria, said the products have never been taxed and with the introduction of the new tax, the cost of the products will rise.
In addition, Nnadi Ugochukwu, a member of the National Association of Government Accredited Freight Forwarders, said: “Of course, the cost of production affects availability and triggers alternative purchases. So if you tax it, the cost of production will increase, and now it will affect the availability of goods to people. The level of availability and affordability, people will start looking for alternatives that may or may not be legal.”