Whose Interest Is It? Oyedele, a tax expert, urges the govt to exercise caution forcing N10 tax on soft drinks

Whose Interest Is It? Oyedele, a tax expert, urges the govt to exercise caution forcing N10 tax on soft drinks

  • Tax expert, Oyedele has expressed concern about federal government decision to tax Nigerian manufacturers on non-alcoholic drinks
  • He believe while the government is looking to generate enough revenue, putting more pressure on manufactures could be counterproductive
  • There are so many tax laws which he believes if properly implemented could help the government generate enough revenue it seeks

Fiscal Policy Partner and Africa Tax Leasder at PricewaterhouseCoopers (PwC) Taiwo Oyedele has expressed concerns on the new N10 per litre tax law on non-alcoholic drinks.

According to him, the Federal government must be cautious in imposing taxes on manufacturers to avoid job losses.

Oyedele told Legit.ng that manufacturers are already battling with rising cost and are unable to match this their selling prices because of Nigerians low purchasing power.

On whose interest? Tax expert, Oyedele question Buhari decision to sign into law N10 tax on Soft Drinks
Nigerians likey to pay more for drinks in the coming years Credit:@adem

Oyedele said:

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"I will be more concerned about industries such as manufacturing since their costs are growing and they are unable to raise their selling prices due to poor purchasing power.
"If you impose a tax, they will have to reduce their employment and find another method to live. In terms of inflation, if you implement an excise tax and the sector is able to pass it on to customers, it will result in increased selling prices, which will contribute to inflation.

He explains further that if the products are very elastic, and you are afraid of losing the market, then you bear the costs and your margins will be low.

"If your margin is low, it means what you pay in company income tax will be less, and your shareholders will get less in dividends, affecting their own purchasing power as well.

So, taxes, sometimes, have unintended consequences, which policymakers must always consider.”

Dangote, MTN top list of highest tax-paying companies in Nigeria

Legit.ng had earlier revealed how much 13 Nigerian companies listed on the Nigerian Exchange Limited (NGX) remitted to the Nigerian government.

The Federal Inland Revenue Service (FIRS) is one of the collecting agencies and recently declared it exceeded its target in the first eight months of 2021.

Companies operating in Nigeria are meant to pay income tax, Education tax, National Information Technology Development Agency (NITDA) tax, and Nigeria Police Trust Fund levy.

Source: Legit.ng

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