FG plans tax hike for tobacco, marijuana

November 15, 2017 1:20 am

The Minister of Budget and National Planning, Udoma Udo Udoma, yesterday disclosed the Federal Government’s plans to hike taxes paid on tobacco, marijuana and other abused, yet harmful substances to make them commercially unattractive.

Udoma stated this in Abuja at the public presentation of the 2018 Budget proposal. According to him, the government was developing a new technology to ensure better tax collection in the country, as the issue of tax evasion has been dragging the country back economically.

On the 2018 budget proposal, the Minister said the document seeks to continue reflationary policies of the 2016 and 2017 budgets, which helped put the economy back on the path of growth.

He added that the 2018 budget was designed to advance the delivery of the goals of the Nigerian Economic Recovery and Growth Plan (ERGP).

“The highlights of the 2018 Federal Government spending show an estimated spend of N8.61 trillion, which exceeded financial year (FY) 2017 projection by 16 per cent. At N2.01 trillion, debt service is 23 per cent of planned spending (about same as in FY2017).

FG plans tax hike for tobacco, marijuana

“Provision to retire maturing bond to local contractors increased by 24 per cent from N177 billion in FY2017 to N220 billion in view of the ambitious plan to liquidate all contractor arrears of the Federal Government going back to several years.

“Recurrent (non-debt) spending is expected to rise by 17 per cent from N2.99 trillion in FY2017 to N3.49 trillion, while capital expenditure (including transfers) is higher by 12 per cent from N2.36 trillion in FY year to N2.65 trillion.

“Overall budget deficit of N2 trillion in the 2018 represents 1.77 per cent of GDP. Project deficit is within threshold stipulated in the Fiscal Responsibility Act (FRA). The budget deficit is to be financed mainly by borrowing N1.699 trillion, which domestic sources account for N850 million and foreign sources N849 billion.

“We must ensure that money derived from the oil sector should be spent on the non-oil sector to revamp other sectors,” he added.

Udoma also disclosed that the Federal Government is set to increase tax rate of tobacco and marijuana companies in a way to restrict the intake of drugs that are harmful.

Also speaking at the event, the Minister of Finance, Mrs. Kemi Adeosun, refuted rumours that the Federal Government had granted tax holidays to some business owners.

She said the government merely granted tax waivers for three years to some companies who were building roads to enable them recoup their investments.

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