1. The coordinating Minister of the Economy Ngozi Okonjo Iweala confirmed Nigeria will be introducing Luxury Tax as a response to the dwindling Oil price.
2. This now warrants increased reliance on taxation as a form of funding government expenditure. Based on this she will be increasing budgeted tax revenue for 2015 to N160b . The FIRS has collected N65b from the N75b targeted this year.
3. She is therefore planning to introduce a “tax on luxurious goods,” stating that this was a part of measures aimed at increasing revenue from non-oil sources.
4. She said that users of luxurious items, such as private jets, yachts, alcoholic beverages and expensive cars, would be required to pay special taxes for such goods.
5. The minister, who said the government was still compiling the list of luxurious goods to be taxed under the new initiative, assured that the proceeds from these items and services would be used to support the economy from external shocks.
“We all know the definition of luxury goods, we are still compiling the lists and one of the things we can tax is champagne, alcoholic beverages, jets, luxury cars- we will look at the engine capacity, and yachts.
“We are putting the list together but we intend to do a surcharge going forward on these items.
“The principle is that those who are better off in the society and I hope they won’t mind will be willing to share a bit more in remitting a little bit more to the treasury than what they normally do on these things.”
A portion of this article was culled from the Punch