Oil Crisis: Nigeria announces new charges on private jets, yachts, champagnes

The Nigerian government has announced new charges on high end products including private jets, yachts and champagnes, in a move the government says will force the rich to pay more to help the country deal with falling oil price.

New private jets will henceforth attract a 10 percent import surcharge, and will generate an estimated N3.7 billion yearly, finance minister, Ngozi Okonjo-Iweala, said Wednesday.

Luxury yachts will attract 39 percent import surcharge with an estimated annual yield of N1.6 billion, while luxury cars will attract five percent surcharge and a yearly yield of about N2.6 billion.

Ms. Okonjo-Iweala said a three percent charge on champagnes, wines and spirits will yield about N2.3 billion.

Also, a mansion in Abuja, worth N300 million and above, will henceforth attract a charge of one percent, referred to as FCT Mansion Tax. The government expects to generate about N360 million from this.

The government expects to raise up N10.56 billion from the surcharges.

Meanwhile, the government says it will stick to a proposed $65 per barrel crude oil benchmark despite the continuing decline in the price of oil.

Oil price continued to fluctuate on Thursday with Brent crude hovering around $62.21.

While presenting the analysis of the 2015 budget proposal already submitted to the National Assembly for approval Wednesday, Mrs. Okonjo-Iweala said the government decided to keep the oil benchmark based on expert advice.

According to the minister, despite the steep drop in crude oil price in recent times, the proposed $65 benchmark was still ideal, as expert estimates point to average price of oil in 2015 to be around that level.

The benchmark represents a $13 drop from the $78 per barrel (about N142 billion of the federal government budget revenue) originally proposed in the Medium Term Expenditure Framework, MTEF, to the National Assembly.

To cushion the negative impact of the declining oil prices on the economy, Ms. Okonjo-Iweala said the government would introduce some short-to-medium term revenue and expenditure measures.

“We should see these challenging times as times of opportunities to further move this economy on the right path,” she said.

She, however, noted that there were still leakages and incidences of non-remittance of funds to the treasury by some agencies.

In the short term, the minister said the government was determined to improve tax revenues by strengthening tax administration in the country and plugging leakages and improve tax collection efficiency.

She also said the government has commenced a review of tax waivers and exemptions, particularly the pioneer status scheme to some oil companies, to curb abuses and attract additional N36 billion tax revenues in 2015.


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  • amazing2012

    A welcome developement: this is long over due, please aunty Ngozie includes Luxury cars, schools, night clubs, houses, and ceremony and recreation tax.

    • Oloto

      You are truly Amazing Sir! Luxury taxes-a strong yes but Schools,ceremonies,recreation taxes should be not included! We shall have more illiterates ( a burden that is already killing us) and become less happy in this country of government manufactured sadness! If Ngo baby and Doro Jona becomes more serious with anti corruption i suspect we should be able to save hundreds of billions!

      • amazing2012

        You are obsoletely right: curbing corruption alone can solve this problem. But who they corrupt ? Will sign awAs to kill yourself ?
        On ceremonies: there are ceremonies that are worth to pay tax. When someone is spending 10 to 15 million Naira for just one day or hours need to pay tax.
        We have schools that employed foreign teachers and pay them in dollars, such schools are not public schools but schools for the Rich not for the masses, tax should be level on such institutions attended by most of the children of the corrupts.
        Reacretion tax: more recreation centers in all states should be establish to generate more revenue.
        We have reached a stage of vigorous survival of the fittest as such more alternative should be put in place.

        • Ogom

          “recreation tax” OR generate revenue from “recreation centres”? They’re actually not the same thing.

          And no one, I mean no one.. anywhere, taxes schools!!

          • amazing2012

            No one does not mean it will start from somewhere. Luxury Schools should be taxed. Rerecreation tax; where people uses sources of relaxation without paying for such.

      • DESTINY,

        Why not high class private school and private university? do you knows how much they do in a term? my dads owns a private nursery, primary, and secondary school, he made more than #600 million naira profits in a single term,

        • say what?

          “my dads owns…..” what are you blabbing about?

  • New Nigerian

    why base the benchmark at $65, when it is $62 per barrel and falling…that is definitely abracadabra economics….and planning to spend money that is known for sure today will not be met by revenue…why not retain the old practice of a benchmark lower than the price tag?

    Madam Minister kindly clarify…

  • King Carlos

    It’s just that the proceeds will end up in private pockets. Just ask them what they did with SURE P.

    • Mike udi

      I ve bn watching ur comment for some time now nd I m forced to believe u re a pessimist. If lagos state tax revenue is agreed to b used judiciously y do u think FG can’t u this well. Our sectional nd parochial sentiment is the worst problem affecting nigeria. Until we believe parties and politicians in Nigeria re like the same people wearing diff shirts to the same function on diff days

      • King Carlos

        Why should I trust the FG when the national treasury is being mismanaged, foreign reserve in shambles, excess crude account is nothing to write home about, NNPC operation is shrouded in secrecy, SURE P money that Jonathan promised us will be saved, is being used to service PDP pockets and you expect me to trust the FG. You are the real pessimist here.

        PDP has been in government for 16yrs and you still want them to get away with their excuses. It’s time we hand over the keys to another driver.

      • Ibraheem Aruna

        I. Know you know you are not being realistic so It will be counterintuitive to join issues with you.

  • Chris1408

    This na rich people austerity measures. Ok, when is the implementation?

  • Ogom

    Define “luxury car”?

  • Ifeanyi Ukpabi

    Nigeria is a funny place…to get TIN for your company,you will have to pay bribe and beg the FIRS people before they can issue number you will use to pay tax.

    • O’male

      Hilarious….

  • taiwo

    Estimated revenue from these luxury products just slightly more than N10b spent on a chartered plane by a minister. What we need more than anything is reduction in waste in federal, state & local govts, especially at the federal govt.