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Federal governement of Nigeria to levy private jets, mansions, luxury cars and other luxury items
| December 18, 2014
While presenting a N4.46 trillion proposed budget for 2015, Nigeria's coordinating minister for the economy and minister of finance, Ngozi Okonjo-Iweala, announced a string of measures by the Federal government to generate more non-oil based revenue in reaction to he recent sharp decline in oil prices. The measures include new levies on luxury items and an increase in the Value Added Tax (VAT) . Beginning in 2015, the government will introduce a 10 percent import surcharge on new private jets which is expected to yield about N3.7 billion in new revenue. Other items that will be subject to a luxury tax include: - Thirty nine percent import surcharge on luxury yachts, which is expected to generate N1.6 billion in 2015 - Five percent import surcharge on luxury cars, expected to generate about N2.6 billion of additional revenues. - Three percent luxury surcharge on champagne, wines and spirits, This is expected to generate about N2.3 billion in 2015. - One percent Mansion Tax on residential properties in the Federal Capital Territory that are valued at N300 million and above This is expected to bring in additional N360 million in 2015. There will also be a surcharge on business and first class tickets on airlines. The Minister of Finance said, "These surcharges will yield a total of about N10.56 billion in 2015,” and will help in supporting the economy and provide Nigeria a path to minimizing the impact of falling oil prices without disproportionately affecting the poor and middle class in the country. The minister also suggested that in the medium term the Value Added Tax (VAT) will potentially be raised from 5 percent currently to 10 percent. She pointed out that Nigerians currently pay one of the lowest VAT rates in the world. She said, “Nigeria has one of the lowest VAT rates in the world and medium term. A 5 percent increase in VAT rate for instance, will yield N614 billion, most of which would go to the states and local governments." These and other measures such as review of Tax Waivers and exemptions, review of the implementation of pioneer status exemptions to some oil companies, etc. are some short-term measures that the government is considering to make up the shortfall in revenue from declining oil revenue.

(3) Comment


"The views and opinions expressed in these comment(s) or article(s) do not necessarily reflect the views or opinions of NGEX, its partners or its affiliates."
OMOTAYO, J. A.    Eldoret, KENYA    January 05, 2015
How can a total saving of N10.56 billions in a year support a debt service regime of N1.1 trillion a year? How can N10.56 billions a year be a substitute for a loss of $45 pbpd ($100 pbpd - previous price less $55 pbpd - current price) crude oil amounting to $5.7 billions (N939 billions approx) a day? Which School of Economics suggested that a 0.2% savings is a significant factor to boost a national economy like that of Nigeria? The Minister is a misfit and undeserving of the position she holds.

There are many areas in the economy that are mere leakages. An example is overseas trips. Last year, Nigeria sent 400 auditors to a world conference of auditors in Rome, Italy. The total delegates worldwide was just 1,600. Nigerian delegation should not have been more than 40 (1 person per state plus FCT and 3 from federal). Mr. Jonathan visited Kenya more than 4 times last year alone. How many such times was Mr. Kenyatta in Nigeria? And many more. Another is the fat allowances of Ministers, National Assembly members, etc which amount to looting of the treasury. Another area is government contracts which cost about two to four times of what they should be. And many more. If all these areas are looked into, over a trillion Naira will be saved. I leave the rest for the time being.
God save Nigeria.
Bishop    Harare, Zimbabwe    December 22, 2014
the idea is very good if there will be proper implementation and accountability. with the natural resources and human capital Nigeria has, citizens of this country should be proud and sufficient, but we tend to be a laughing stock and play second fiddle to even other smaller nations. God help us
James Udo Kalu    Port Harcourt, Nigeria    December 20, 2014
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