Impact Assessment of the 2023 Fiscal Policy Measures


  • The Nigerian Government has implemented new taxes on beer, imported vehicles, and single-use plastics. The excise duty on beer and stout will start at N75 per liter in 2023 and will be raised to N100 per liter in 2024. The Green Tax on Single Use Plastics (SUPs) including plastic containers and bags will be charged at a rate of ten percent. Additionally, a five percent excise duty will be imposed on mobile telephone services, fixed telephone, and internet services. Imported wine will also have the same excise rate as beer. Vehicles with two-liter engines will be subject to a two percent Import Adjustment Tax (IAT), while those with four-liter engines or more will have a four percent IAT.
  • The 2023 FPM may have more profound impacts on the beverages and tobacco and plastics sectors as well as on car importation but may have limited effects on the earnings of telecommunication service providers as they will find it relatively easier to pass on these costs to consumers. This may however have negative effects on other sectors as consumers may retain telecoms expenditure and prioritize consumption away from alcoholic beverages, tobacco, wines and spirits and plastics sectors, that are price elastic, have close substitutes and a well-established ‘black-market’ trade that can ensure continuous supply and evade taxes.
  • The timing of the 2023 FPM may not be effective given the recovery status of the economy and current hyperinflation. Further price rises may squeeze consumers demand and worsen already declining business margins such that the expected revenue expected by government from the new duty may be unrealized.


The Federal government has introduced new Fiscal Policy Measures (FPM) for 2023 in a circular dated April 20, 2023. An analysis of the fiscal policy document signed by Zainab Ahmed, Minister of Finance, Budget & National Planning, shows the government has introduced additional excise taxes increases ranging from 20% to 100% on previously approved rates for alcoholic beverages, tobacco, wines and spirits, effective from 1 June 2023. Additionally, a Green Tax made up of excise duty on Single Use Plastics (SUPs), including plastic containers, films and bags was introduced at the rate of 10%. Furthermore, the 2023 FPM circular also confirmed the excise duty on telecommunication services earlier introduced via the Finance Act 2020 and prescribed in the Official Gazette No. 88, Vol. 109 of 11 May 2022 but which was suspended last year. This tax is applicable on mobile telephone services (GSM), fixed telephone and internet services, both postpaid and prepaid at the rate of 5%. Already the government has for the last few years increased rate of VAT to 7.5% and plans to further increase it to 10% in addition to other measures aimed at increasing and widening its tax and revenue collection, many of which has been focused on extracting more income from consumers and businesses.

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KPMG Nigeria is pleased to have made a significant contribution to a recently released report by the World Economic Forum (WF) in partnership with the Renewable Energy & Energy Efficiency Associations Alliance (REEEA-A) and Marsh. The seminal paper on ‘Mobilising Investments for Clean Energy in Nigeria’ was launched at the Nigeria Country Roundtable on 2 May 2023 with Erabor Okogun, the Advisory Head of Energy Infrastructure, KPMG Nigeria, who was invited to provide a deep dive into the pressing issues and solutions thereof.