The new excise duty for alcoholic beverages and tobacco approved by President Muhammadu Buhari takes effect from today. It will affect the price of beer, spirits and tobacco In March, Minister of Finance Mrs Kemi Adeosun, said the president granted a grace period of 90 days to manufacturers of the products. The new excise duty rates will spread over three years between now and 2020 so as to moderate the impact on prices of the products. The minister said the upward review of the excise duty rates for alcoholic beverages and tobacco would raise the government’s revenue as well as reduce the health hazards associated with tobacco-related diseases and alcohol abuse. Adeosun said the new duty rate on tobacco is a combination of the existing ad-valorem base rate and specific rate while the ad-valorem rate was replaced with a specific rate for alcoholic beverages. Under the new rates for tobacco, in addition to the 20 per cent ad-valorem rate, each stick of cigarette will attract one naira specific rate per stick; that is N20 per pack of 20 sticks in 2018. In 2019, tobacco will attract two naira specific rate per stick or N40 per pack of 20 sticks and by 2020, tobacco will begin to attract N2.90 kobo specific rate per stick or N58 per pack of 20 sticks. The cumulative specific excise duty rate for tobacco is 23.2 per cent of the price of the most sold brand. In Algeria, the excise duty rate is 38.14 per cent it is 36.52 per cent in South Africa and 30 per cent in The Gambia. Mrs Adeosun said the new specific excise duty rate for alcoholic beverages cut across beer and stout, wines and spirits for the three years 2018 to 2020. Under the new regime, beer and stout will attract 0.30k per centilitre (Cl) in 2018 and 0.35k per Cl each in 2019 and 2020. Wines will attract N1.25k per Cl in 2018 and N1.50k per Cl each in 2019 and 2020, while N1.50k per Cl was approved for spirits in 2018, N1.75k per Cl in 2019 and N2 per Cl in 2020. Director-General, Consumer Protection Council (CPC) Babatunde Irukera described the decision as consistent with prevailing global practices. He said he was convinced government’s approach would foster consumer confidence, provide regulatory clarity and prioritise safety, to reinforce the mandate of the council. Deputy Executive Director, Environmental Rights Action of Earth Nigeria Akinbode Oluwafemi, described the decision to increase excise duty on tobacco as praise-worthy. “We applaud the federal government for making tobacco products priced beyond the reach of our kids and the poor who are unfortunately targeted by the tobacco industry through their cheap but lethal products. “Considering the looming tobacco menace in Nigeria, it is necessary to take stringent measures to halt the deliberate marketing of tobacco products to kids,” Oluwafemi said. But Manufacturers Association of Nigeria President Dr Frank Jacobs, expressed fear that the proposed hike might lead to closure of factories and loss of jobs. The News Agency of Nigeria (NAN) recalled that the ECOWAS Council of Ministers at its 62nd and 79th Ordinary Sessions in Abuja in May 2009 and December 2017 issued directives on the harmonisation of the ECOWAS Member States’ Legislations on Excise Duties. The International Monetary Fund (IMF) in its 2017 mission report advised Nigeria to raise the excise duty on a stick cigarette to N5, which is five times the approved amount. “The low tax level prevails even though Nigeria is the highest alcohol drinking country in Africa and leads the top 10 largest beer drinking countries,” the Fund said. The new rates also fall short of the more aggressive recommendations of the World Health Organisation (WHO) in Article 6 of the Framework Convention on Tobacco Control (FCTC), which suggests 70 per cent excise on tobacco products.]]>
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