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FG levies tariff on imported goods, services

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By Abraham Adekunle

President Buhari approves implementation of ECOWAS CET and revised excise duty.

The Economic Community of West African States (ECOWAS)’s Tariff and Statistics Nomenclature is a common customs nomenclature that is based on the harmonized system of description and coding of goods. This system is generally accepted and adopted by the Community. It defines the list of goods that makes up the Tariff and Statistics Nomenclature categories of the CET. According to ECOWAS, Common External Tariff (CET), a key feature of a Customs Union, is the application of the same customs duties, import quotas and preferences by a group of countries in a customs union. These duties, quotas and preferences applies to goods entering the region of the customs union irrespective of the country of first entry.

Consequently, this regional organization uses the CET as an instrument for the harmonization of member states as well as strengthening its common market. To establish an economic union, the community ensures that a common market is established by adopting a common external tariff and common trade policy. Because of this, ECOWAS Authority of Heads of State and Government established an ECOWAS Customs that requires that a common external tariff with a common nomenclature be formulated so that customs procedures are transparent, readily followed and delays at borders decreased.

FG imposes tariff on a number of goods, including alcohol.

It is based on this that Nigeria’s Minister of Finance, Zainab Ahmed, revealed to the press that the Federal Government has imposed a 30-percent tariff on the importation of alcoholic beverages. They include wine, spirits (such as whiskey, brandy, vodka, rums), smoking tobacco, cigarettes, among other items. Ahmed confirmed that President Muhammadu Buhari has approved the implementation of the 2023 fiscal measures, which are made up of Supplementary Protection Measures (SPMs) for the implementation of ECOWAS CET 2022-2026, revised excise duty rate on alcoholic beverages, cigarettes and tobacco products, as well as the introduction of excise duty on Single Use Plastics (SUPs).

Apart from these products, the government also imposed a 5-percent duty on telecom services. This includes mobile telephony and operations (GSM), fixed telephony operators (fixed/fixed wireless), internet service providers (ISPs) and other operators. So, tariff on prepaid and postpaid for these services have now been pegged at five percent. The government also increased tariff on importation of smartphones to 15 percent from its previous five-to-ten percent, raw cane sugar from 60 percent to 70 percent, and palm oil from 25 percent to 35 percent. Beer and stout, including other alcoholic beverages and non-malted beer, attracts 20 percent import duty whether fermented or not.

Green tax is introduced as commitment to climate change adaptation.

However, some items were imposed low percentage tariffs. Vehicle engine size of between 2000cc and 3999cc now attracts an import duty of two percent while vehicle engine size of 4000cc and above attracts four percent. The Federal Government has reduced tariffs on maize to five percent from ten percent and left tariff on aluminum cans unchanged at ten percent. Meanwhile, a green tax made up of excise duty on SUPs and Import Adjustment Tax (IAT) levy has been introduced on motor vehicles of year 2000 and above.

The government said that this is part of Nigeria’s commitment to climate change adaptation and mitigation of environmental degradation. According to a document released by the finance minister, the approved Supplementary Protection Measures (SPMs) in line with the provision of the ECOWAS CET shall take effect from May 1, 2023. They include IAT list with additional taxes on 189 tariff lines of the extant ECOWAS CET, an Import Prohibition trade list (which is applicable to only certain goods originating from non-ECOWAS member states), and national list consisting of items with reduced import duty rates to promote and stimulate growth in critical sectors of the economy.

Nigeria gives conditions for these new policies.

In the same vein, the government has affirmed that the aforementioned national list will continue to form chapter 99 in the ECOWAS CET, which is to be implemented by the country. Only verifiable investors/manufacturers who require the concessionary import duty under the new chapter 99 as inputs for production will be able to access them. The document also stipulates that a 90-day grace period will be granted to all importers who had opened Form “M” and who must have entered into an irrevocable trade agreement before this policy was approved by the president. The period will commence on May 1, 2023 and these importers will be able to process and clear their goods at the initial duty rates.

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