Nigeria Go Increase Tax for Beer, Tobacco as World Bank Talk Come

Na wah! Federal Government don announce say dem fit increase taxes for alcohol and tobacco as dem wan change how dem dey collect money for the country.

Dis one na part of the plan wey World Bank dey back with $750 million, wey dem believe say go help Nigeria increase wetin dem dey collect when e no get to do with oil. According to report, dem say the excise rates on ‘sin goods’ for Naija dey very low, so dem wan raise am from 2026.

We fit recall say back in 2020, PwC show say Nigerian excise duty for alcohol and tobacco dey follow hybrid system wey mix two methods: ad valorem rates and specific levies. Wine and beer dey chop 20% tax, plus per litre charge, while cigarettes dey collect same 20% tax plus charge per stick.

Recently, the Tariff Review Board don agree say dem go increase these charges for beer, spirits, and tobacco from 2026 go later. Dem dey prepare to hand over the proposal to Finance Minister make e fit start from January 2026.

Dis tax increase na part of the strategies wey Nigeria dey try put together to reduce di country reliance on oil revenue wey dey fluctuate, and to sustain wetin we dey call fiscal stability. World Bank don already approve the financing wey go run till November 2028.

As we dey talk, the report show say VAT don jump to 2.30% of non-oil GDP by December 2024, wetin pass di target of 1.80% for 2027. Na wetin dey cause this na the introduction of VAT withholding for areas like telecommunications and banking.

But e no be all rosy, oo! Although VAT collection don increase, compliance don drop from 41% to 32% in 2024. Dem say plenty people dey file VAT returns, but di percentage wey dey file on time don kpeme.

Company income tax filings no get am easy too; dem improve reach 41.5% but later settle for 34% as more people register to file. Na to get plenty stakeholders na im cause this wahala.

On top environmental tax matter, dem dey try put green taxes for harmful products, but dem still dey gree over heavy vehicles wey get engine wey big pass 2.0 litres. Also, na new five percent carbon levy dey on petroleum products, but dem never finalize wetin dey for ground.

For oil revenue matter, na mixed report wey we dey see. Though FAAC don try improve reporting for NNPCL, implementation still dey slow like snail.