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.