The Nigerian Customs Service has requested for the collection of Excise Duty from carbonated drinks producers in the country, especially the Nigeria Bottling Company, makers of Coca-Cola, Fanta, Sprite and others.
The Controller General of Customs, Hameed Ali, made this known while appearing before the Senate Joint Committees on Finance and National Planning.
Ali revealed it was the regime of Ernest Shonekan that stopped the payment of Excise Duty for carbonated drinks manufacturers like Coca-Cola in 1993.
The Custom Controller General urged the Federal Government to terminate the tax waivers regime granted local companies producing soft drinks in the country.
He called on the Federal Government to broaden its excise tax net to include carbonated drinks.
He said doing so would boost revenue generation since tariff collection on import would drop in 2021 and beyond due to the trade agreement between Nigeria and neighbouring countries.
The Custom’s CG wondered why companies like Coca Cola, Pepsi Cola and other non alcoholic beverage firms were not paying taxes in Nigeria when they do in other countries where they have operations.
He said the defunct Interim National Government of Shonekan granted the waivers to the carbonated drinks manufacturers in 1993 to encourage local firms.
He, however, said the policy should no longer be sustained in view of the current reality occasioned by the nations dwindling revenue.
Ali said: “We have been pushing for the expansion of our own Excise collection.
“During the Shonekan regime, Excise was stopped for carbonated drinks manufacturers like Coca-Cola.
“The only one approved for us are tobacco and alcoholic beverages.
“The understanding then was that tobacco and alcoholic beverages affect the health of citizens and should therefore be taxed.
“But we know that carbonated drinks are also injurious to the health of the people due to the high sugar content.
“Therefore, if tobacco and alcoholic beverages companies are paying tax, the carbonated drink manufacturers should also pay.
“The collection on import will reduce because of the trade agreement we have signed.
“So, if we don’t expand our Excise, the collection from Customs will drop.”
The President of the Senate, Ahmad Lawan, supported the submissions of Ali and stressed the need for the Federal Government to immediately review the policy so as not to affect the nation’s economy.
Lawan said: “Collection of Excise from Coca Cola and others is in order.
“This is not going to be an executive function alone.
“The executive and the legislature should work together to identify all firms that really deserve waivers because I don’t understand why Coca-Cola for instance should not pay excise.
“It is an established company all over the world and it dominates the soft drinks industry.
“Unless we are turning ourselves to a country of subsidy for international companies, we should look into it.
“Let us also look at what we have lost over the years.
“While we are not trying to overburden private companies, we should try and see how to make the economy survive.”
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