As part of the implementation of the Common External Tariff (CET) 2022–2026 of the Economic Community of West African States (ECOWAS), the Federal Government has announced a review of the Import Adjustment Tax (IAT), increasing import duties on 189 commodities including rice, wheat, and alcohol, Entrepreneurng report.
The 2023 updated document increased the tax on rice packaging weighing more than 5 kg or in bulk, as well as packaging weighing 5 kg or less, from 50% to 60%. In a similar vein, imports of wheat or meslin flour now carry 70 percent tariffs as opposed to 50 percent in the ECOWAS CET 2022–2026.
In a document, Zainab Ahmed, the minister of finance, made this claim. The title of the document is “Revised Import Adjustment Tax (IAT) for Implementation of ECOWAS CET (2022-2026), 2023 Fiscal Policy Measures.”
The document states: “This is to confirm that his excellency Mr. President has approved for the implementation of the 2023 fiscal measures made up of Supplementary Protection Measures (SPMs) for the implementation of ECOWAS Common External Tariff 2022–2026 and revised excise duty rate on alcoholic beverages, cigarettes, and tobacco products, as well as the introduction of excise duty on Single Use Plastics (SUPs),” she said.
The ECOWAS CET, which runs from 2022 to 2026, and excise taxes on items like non-alcoholic beverages, alcoholic beverages, cigarettes, and tobacco products, as well as telecommunication services, were among the fiscal policy measures that Ahmed had announced in a circular last year.
CET is the practice of a collection of nations in a customs union applying the same customs taxes, import quotas, and preferences. No matter where the commodities are imported into the customs union, the aforementioned import tariffs, quotas, and preferences apply to them.
One of the key tools for harmonizing ECOWAS member states and expanding its single market is the common external tariff.
“Chapter 99 of the ECOWAS Common External Tariff to be implemented by Nigeria should continue to be comprised of commodities with import tax reduction to support and boost growth in vital sectors of the economy. The new Chapter 99’s concessionary import tariff will only be available to verified investors and firms who need those imports as production inputs.”
“All importers who have opened Form ‘M’ and must have engaged into an irreversible trade agreement before the entry into effect of this circular, shall be granted a grace period of 90 days to process and clear their products at the prevailing tax rates, beginning May 1, 2023. However, beginning on May 1, 2023, the new import duty regime will apply to all new import transactions.”
In conclusion, beginning on June 1, 2023, the updated excise tax rate on alcoholic beverages and tobacco products will be implemented by the current excise regime, and it will be raised upward by the new regime by June 1, 2024. On June 1, 2023, the excise tax on single-use plastics (SUP) will also go into force.
Source: Punch
