No revenue generated from luxury item tax for Nigeria

No revenue generated from luxury item tax for Nigeria.

No revenue generated from luxury item tax for Nigeria

Nigeria has not generated any revenues from the luxury item tax that was introduced in 2015.

A release from country’s Budget Office has revealed, based on data from the 2019 Budget implementation report.

The government had budgeted a tax revenue of N2.5 billion in the 2019 budget.

There were also no taxes  collected in the 2018 fiscal year based on the published data.

Findings show that there is no published data for 2017 and 2016 as reported by Business Hallmark. A sum of N2.5 billion was also budgeted in 2018.

READ ALSO: July 2020 bonds oversubscribed by N340bn – DMO

Former President Goodluck Jonathan during his administration in 2014 initiated plans to introduce luxury taxes as an initiative targeted at increasing government’s tax revenue.

The taxes targeted luxury items such as private jets, luxury yachts, luxury cars, business class/first class tickets on airlines and other major items typically purchased by the rich.

A report by PricewaterhouseCoopers, PWC seen by Business Hallmark, the following rates applied to taxes for luxury items; 0% import surcharge on new private jets; 39% import surcharge on luxury yachts; 5% import surcharge on luxury cars; undisclosed surcharge on business and first
class plane tickets; 3% luxury surcharge on champagnes; wines and spirits; and a 1% Federal Capital Territory (FCT) mansion tax on residential properties valued at N300million and above.

The Nigerian government had banked on a tax revenue of N480 billion in 3 years during the period that the tax was being promoted, the PWC report reveals.