New levy on imported vehicles and alcoholic beverages - FG

 

The Nigerian government has recently introduced new taxes on imported vehicles, alcoholic beverages and single use plastics, and has also updated the list of items banned from being imported into the country. The new tax regime is set to come into effect on June 1, 2023, according to a circular issued by the Federal Ministry of Finance, Budget and National Planning.

Under the new tax regime, imported vehicles with engine sizes ranging from 2000cc to 3999cc will pay a two per cent Import Adjustment Tax (IAT) levy on the value of the vehicle, while vehicles with engine sizes of 4000cc and above will attract a four per cent IAT levy. This is in addition to the existing 35% import duty and 35% levy paid by importers of vehicles. However, vehicles below 2000cc, mass transit buses, electric vehicles, and locally manufactured vehicles are exempt from the IAT levy.

In addition to the new tax on imported vehicles, the Nigerian government will charge N75 per litre of beer, stout and wine imported into the country in 2023 and N100 per litre in 2024. Prior to the new tax regime, imported alcoholic beverages were taxed ad valorem, meaning the tax or customs duties were proportional to the estimated value of the goods or transaction concerned.

The government has also updated the import prohibition list to include used motor vehicles above 12 years from the year of manufacture, paracetamol tablets and syrups, cotrimoxazole tablets and syrups, metronidazole tablets and syrups, chloroquine tablets and syrups, folic acid tablets, vitamin B complex tablets (except modified release formulations), multivitamin tablets, capsules and syrups (except special formulations), aspirin tablets (except modified release formulations and soluble aspirin), magnesium trisilicate tablets and suspensions, piperazine tablets and syrups, levamisole tablets and syrups, ointments penicillin/gentamycin, pyrantel pamoate tablets and syrups, intravenous fluids (dextrose, normal saline, etc.), waste pharmaceuticals and mineral or chemical fertilisers containing the three fertilising elements – nitrogen, phosphorus and potassium.

Lastly, the government has introduced a green tax in the form of an excise duty on single use plastics, including plastic containers, films, and bags at a rate of 10%. The new taxes and import bans have been put in place to promote locally manufactured goods and protect the environment.